PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

LONDON COUNTY COUNCIL (MONEY) BILL

Read the Third time, and passed.

Oral Answers to Questions — NATIONAL WAR EFFORT

Coalmining (Directed Youths)

Mr. Rhys Davies: asked the Minister of Labour how many ballottees have refused to enter the coalmining industry; how many have been prosecuted for refusing; and how many of them have been imprisoned.

The Minister of Labour (Mr. Ernest Bevin): I have no exact figure of the number of ballottees who have refused to enter coal-mining. Up to 31st May, there had been 285 failures to comply with directions to undergo training, but this total, no doubt, included a certain number of cases in which there were good reasons, such as sickness, for not complying immediately. Up to the same date, 135 ballottees had been prosecuted for failing to comply with directions either to coalmining training or to a working colliery. Of these, 32 were sentenced to imprisonment, but within a few days 19 of these were released, on promising to comply with their directions.

Mr. Rhys Davies: In view of the reluctance of some courts to convict in cases like this, because the boys prefer to enter the Forces rather than the mines, and in view also of the fact that the High Court of Justice in New Zealand has recently decided that compulsions like this are akin to the serfdom of the Middle Ages, will not my right hon. Friend reconsider his policy?

Mr. Bevin: No, Sir. Some things in the Middle Ages were worth preserving.

Sir Herbert Williams: Has the right hon. Gentleman completed his inquiries into the case of my constituent who wanted to go coalmining when directed, but was arrested by the Secretary of State for War?

Mr. George Griffiths: Does my right hon. Friend know how many young men there are in the mines who desired to go into the Forces but were not allowed to go?

Mr. Bevin: No, Sir.

Injured and Unfit Miners

Mr. Foster: asked the Minister of Labour whether he is aware of the position of injured workmen in the mining industry when certified fit for suitable light employment and when work is not found by the employer the workman is being released from the industry by National Service officers; that in those cases where release has been refused, or a period of time elapses before release is granted, payment of the guaranteed wages has been refused under the Essential Work (Mining Industry) Orders, on the grounds that the injured workman is not fit for his usual employment; and will he take steps to remedy this position.

Mr. Bevin: I am aware that there have been a few cases where hardship has arisen in the circumstances described in the Question, and I am considering what steps can be taken to avoid such cases arising in future.

Mr. Foster: Cannot my right hon. Friend take some steps through the National Service Officers to prevent employers obtaining the release of these injured workmen, and by that means getting rid of their liability in respect of compensation and rehabilitation or a return to work?

Mr. Bevin: My hon. Friend will appreciate that I really act in this business as an agent for the Minister of Fuel and Power, but I will go into it with him and see what can be done.

Mr. Thomas Fraser: asked the Minister of Labour if he is satisfied that when miners are released from the industry on medical grounds it is made sufficiently clear whether the release is temporary or permanent; whether he is aware many of these miners have now been called to the


services; and will he take steps to ensure that when both the employer and the employee are satisfied as to the man's fitness to render a useful service in the mining industry and a job can be found, such person will not be called to the Forces.

Mr. Bevin: A miner who is not permanently unfit for coalmining, may be transferred temporarily to other employment under a definite and clearly explained arrangement with him and his previous and prospective employers for him to return to coal-mining when fit. Such cases are kept under review, and a man would not be called up to the Forces, if coal-mining employment for which he was medically fit were available. If my hon. Friend knows of any cases of miners who are only temporarily unfit being called up to the Forces, I should be glad to have particulars in order that I may make inquiry.

Mr. Fraser: Is my right hon. Friend not aware that I have myself had several cases before his Department where miners are not satisfied that they are permanently unfit; and would it not be a very good thing to make the fullest use of these men with coalmining experience?

Mr. Bevin: I was not aware of that.

Mr. R. J. Taylor: Does not my right hon. Friend think that a miner who has been doing high-grade work but who, owing to an accident, is unfit to do that work, could still do useful work on a lower grade?

Mr. Bevin: Again I would point out that the question of the placing of the men is a matter for the Minister of Fuel and Power, but I will take this question up, equally with the one I answered just now, and look into it.

Pamphlet

Sir H. Williams: asked the Minister of Labour if he will arrange to make available to Members a supply of the pamphlet "The Story of Britain's Mobilisation for War."

Mr. Bevin: I am informed that copies of this publication are available to Members, on application to the Stationery Office on the usual form.

Sir H. Williams: Having regard to the fact that the information contained in this

pamphlet has frequently been refused to the House on security grounds, why is it now published in pamphlet form available to the public?

Mr. Bevin: There is nothing in the pamphlet that has been refused to the House on security grounds.

Sir H. Williams: Does the right hon. Gentleman remember the Questions I have asked about the total number of people employed?

Mr. Bevin: No Minister, however good his memory, could remember all the questions the hon. Member asks.

Sir H. Williams: Does the right hon. Gentleman remember his own answers?

Industrial Wages

Sir H. Williams: asked the Minister of Labour in what industries, in addition to coalmining, have the wages paid per unit of output increased by more than 100 per cent. between 1939 and 1943.

Mr. Bevin: I regret that statistics giving this information are not available. I should add, that my information does not confirm my hon. Friend's suggestion that wages per unit of output in coalmining, have increased by more than 100 per cent. in the period mentioned.

Sir H. Williams: Is the right hon. Gentleman aware that I extracted that information on the day on which I wrote the Question, from the "Ministry of Labour Gazette," of which he is the editor-in-chief?

Mr. Gallacher: Has the right hon. Gentleman found any evidence that big wages in coalmining have induced the hon. Member for South Croydon (Sir H. Williams), or any of his friends, to apply for a job?

Young People (Work on Ships)

Mr. Walter Edwards: asked the Minister of Labour whether he can make a statement as to the employment of young persons in such work as boiler-scaling and the cleaning of bilges on ships in port.

Mr. Bevin: Yes, Sir. I am glad to be able to inform the House that, under the auspices of the Factory Department, an agreement has recently been concluded among the principal organisations of employers and trades unions concerned, under which, among various measures for


the protection and welfare of older workers, it has been agreed that firms engaged in scaling, scurfing or cleaning boilers (including combustion chambers and smoke boxes), or in cleaning oil-fuel tanks or bilges in a ship, should not employ persons under 18 in such work. The agreement applies to ships which have been commissioned, and have been in service, whether they are in a dock, harbour or canal, or in a regular shipbuilding yard. I should add, that any work of this kind done by the master or crew of a ship, is excluded from the Factories Act, and the agreement does not cover it.

Oral Answers to Questions — PEAK DISTRICT (NATIONAL PARK)

Mr. Mander: asked the Minister of Town and Country Planning if he has considered the plan for the establishment of a Peak District national park, including Dovedale, a copy of which has been sent to him; and if he has any statement to make.

The Parliamentary Secretary to the Ministry of Town and Country Planning (Mr. Henry Strauss): As stated in the answer to the hon. Member for Devizes (Sir P. Hurd) on 27th January, 1944, a special survey is being made of areas likely to be suitable for National Parks. My right hon. Friend has received the report mentioned in the Question, and will give it sympathetic consideration.

Mr. Mander: Will the hon. Gentleman bear in mind the great importance of preserving this area in view of its great beauty and also in view of the immense population involved, including Staffordshire?

Mr. Strauss: Those considerations will certainly not be overlooked.

Mr. Lipson: When will the survey be finished?

Mr. Strauss: I do not think I can add to my answer. Perhaps my hon. Friend will refer to the previous answer that I have mentioned.

Mr. Lipson: Can my hon. Friend say how long the survey has taken already?

Mr. Strauss: Not without notice. If my hon. Friend fears that some damage may be done in the meantime, he will find the necessary reassurance if he will refer to the previous answer.

Oral Answers to Questions — LAND ACQUISITION (COMPENSATION)

Captain Prescott: asked the Minister of Town and Country Planning if he will give an assurance that, in formulating proposals for the compensation to be paid for the acquisition of land for public purposes, he will bear in mind that in many cases land has, since 31st March, 1939, been purchased by speculators at less than the value as at that date, in the hope of gaining profit based on the Government's announcement of 1939 values; and that such speculators will be deprived of any such gain.

Mr. H. Strauss: I would ask my hon. and gallant Friend to await the terms of the forthcoming Bill and White Paper.

Captain Prescott: I and many other Members are awaiting that Bill, but in the meantime will my hon. Friend give the assurance for which I ask in the Question?

Mr. Strauss: I am not prepared to add to the answer that I have given.

Captain Prescott: In view of the very unsatisfactory nature of the answer, I beg to give notice that I will raise the matter on the Adjournment.

Oral Answers to Questions — INDIA

Food Production

Mr. Price: asked the Secretary of State for India whether, in view of the annual increase of population in India and the low standard of agricultural production over that continent threatening recurrence of famine, he has taken any steps to appoint personnel and set up departments under the Central Government of India which will draw up a plan of land reform and agricultural and scientific development in food production.

The Secretary of State for India (Mr. Amery): The matters referred to by the hon. Member are primarily within the Provincial sphere. For co-ordination purposes however the Department of Education, Health and Lands has long existed at the Centre and has the assistance of the Imperial Council of Agricultural Research and the Nutritional Research Laboratory. A Food Department was set up in 1942. Land reform, agricultural improvement and scientific research are among the problems which the new Mem-


ber of the Governor-General's Executive Council for Planning and Development will have to consider.

Mr. Price: Do I understand from that reply that the responsibility in a matter of this kind rests mainly with the Provincial Governments? Do not the Central Government recognise the urgency of raising the standard of agriculture in India, and do they not take full responsibility for taking the initiative in this matter?

Mr. Amery: All that is covered by the answer I have given.

Parliamentary Franchise (Service Register)

Mr. Bellenger: asked the Secretary of State for India what percentage of British forces serving in India and adjacent commands have been issued with A.F. B2626 or its equivalent.

Mr. Amery: The Indian reprint of Form B2626 is expected to be available very shortly for all British forces in the Indian Command and South East Asia Command. The administrative arrangements for the distribution of the form have already been made.

Mr. Bellenger: Why has there been this delay in issuing this form to the large number of British troops in India? Will my right hon. Friend take steps, as the Service Ministers are doing, to find out the progress that has been made in registering Service men overseas?

Mr. Amery: The matter has been handled directly through the Service Ministries concerned. The troops in question are spread over a continent, and the necessary forms have been printed as well as circulated in India. I do not think that there has been unreasonable delay.

British Army Personnel (Income Tax)

Mr. Leslie: asked the Secretary of State for India whether he is aware that British soldiers serving in India who were exempt from Income Tax in this country have to pay Income Tax to the Indian Government; and will he consult with the Indian Government with a view to removing what is considered to be a decided hardship.

Mr. Amery: I would refer the hon. Member to the reply which I gave to the hon. Member for Bassetlaw (Mr. Bellen-

ger) on 26th October, 1943, and to two earlier replies which I gave on this subject on 13th May and 3rd June, 1943. I am sending him copies of these. Since then, the position of British Army personnel has been improved, both by the raising of the Income Tax exemption limit from Rs. 1,500 to Rs. 2,000 per annum, and by the grant of a special allowance to junior married officers. These measures have gone a considerable way to remove or compensate for the difference to which the hon. Member refers.

Mr. Bellenger: As my right hon. Friend has given me earlier information on this matter, will it be possible to publish in HANSARD the information he is sending to my hon. Friend or to send me a copy?

Mr. Amery: I will do that with pleasure.

British and American Canteens (Customs Duty)

Mr. Astor: asked the Secretary of State for India what is the rate of duty on tobacco, beer and spirits charged in India for goods imported for the British and American forces, respectively.

Mr. Amery: In accordance with the general policy of His Majesty's Government, which also applies in this country, goods, including beer and tobacco, which are imported into India by the United States Government for the use of American troops are exempted from duty. Owing to shipping difficulties the great bulk of supplies of tobacco, and beer for consumers for the much larger number of British troops in India are drawn from Indian sources. For such of the articles mentioned by my hon. Friend as are imported the rates of duty are those laid down in the Indian Customs Schedule. As details are complex I will circulate them in the OFFICIAL REPORT.

Mr. Astor: Is it not most extraordinary that there should be discrimination between British and American troops in India in regard to the duty paid on their tobacco going into the country, and will my right hon. Friend ask the Indian Government to see if some way can be found to equalise the burden between the two?

Mr. Amery: The situation is not extraordinary because there is a similar situation in this country.

Following is the information:

Rates of duty on beers, spirits, tobacco, etc., imported into India.


Item No.
Name of Article.
Nature of duty.
Standard rate of duty.
Preferential rate of duty if the article is the produce or manufacture of


The United Kingdom.
A British Colony.
Burma.


22(2)
Ale, beer, porter, cider and other fermented liquors—




The rate at which excise duty is leviable at the place of importation plus one-fifth of the total duty.



(a) In barrels or other containers containing 27 oz. or more
Revenue
Re. 1–2 per Imperial gallon.
—
—



(b) In bottles containing less than 27 oz. but not less than 20 oz.
Revenue
Three annas per bottle.
—
—



(c) In bottles containing less than 13½ oz. but not less than 10 oz.
Revenue
One anna and six pies per bottle.
—
—




(d) In bottles containing less than 6¾; oz. but not less than 5 oz.
Revenue
Nine pies per bottle
—
—




(e) In other containers*
Revenue
Re. 1–8 per Imperial gallon.
—
—



22(3)
Wines, not containing more than 42 per cent, of proof spirit—




The rate at which excise duty is leviable at the place of importation plus one-fifth of the total duty.



(a) Champagne and other sparkling wines
Revenue
Rs. 15–12 per Imperial gallon.
—
—



(b) Other sorts
Revenue
Rs. 9 per Imperial gallon.
—
—


22(4)
Spirits (other than denatured spirit)—




The rate at which excise duty is leviable at the place of importation plusone-fifth of the total duty.



(a) Brandy, gin, whisky and other sorts of spirits not otherwise specified, including wines containing more than 42 per cent, of proof spirit.
Revenue
Rs. 45 per Imperial gallon of the strength of London proof.
—
—



(b) Liqueurs, cordials, mixtures and other preparations containing spirit not otherwise specified—








(i) entered in such manner as to indicate that the strength is not to be tested.
Revenue
Rs. 60 per Imperial gallon.
—
—
—



(ii) not so entered
Revenue
Rs. 45 per Imperial gallon of the strength of London proof.
—
—
—

Item No.
Name of Article.
Nature of duty.
Standard rate of duty.
Preferential rate of duty if the article is the produce or manufacture of


The United Kingdom.
A British Colony.
Burma.


22(4)
Provided that—







-cont.
(a) the duty on any article included in this item shall in no case be less than the duty which would be charged if the article were liable to a duty of 30 per cent, ad valorem;








(b) where the unit of assessment is the Imperial gallon of the strength of London proof, the duty shall be increased or reduced in proportion as the strength is greater or less than London proof.







22(5)
Spirits—




The rate at which excise duty is leviable at the place of importation plus one fifth of the total duty



(a) Bitters—







(i) entered in such a manner as to indicate that the strength is not to be tested.
Preferential revenue.
Rs. 60 per Imperial gallon.
—
Rs. 54 per Imperial gallon.
—



(ii) not so entered
Preferential revenue.
Rs. 45 per Imperial gallon of the strength of London proof.
—
Rs. 40–8 per Imperial gallon of the strength of London proof.
—



(b) Drugs and medicines containing spirit—








(i) entered in such a manner as to indicate that the strength is not to be tested.
Preferential Revenue.
Rs. 48 Imperial gallon.
Rs. 43–31/5 per Imperial gallon.
Rs. 43–31/5c per Imperial gallon.
—



(ii) not so entered
Preferential revenue.
Rs. 34–121/5 per Imperial gallon of the strength of London proof.
Rs. 31–3 per Imperial gallon of the strength of London proof.
Rs. 31–31/5 per Imperial gallon of the strength of London proof.
—


22(5)
(c) Perfumed spirits
Revenue.
Rs. 60 per Imperial gallon or 25 per cent, ad valorem, whichever is higher plus one fifth of the total duty.
—
—
—

(d) Rum
Preferential revenue.
Rs. 45 per Imperial gallon of the strength of London proof.
—
Rs. 40–8 per Imperial gallon of the strength of London proof.
—



Provided that—








(a) on any article chargeable under this item with the lower rate of duty, the duty levied shall in no case be less than 24 per cent, ad valorem, and on any article chargeable under this item with the higher rate of duty, the duty levied shall in no case be less than 36 per cent, ad valorem;








(b) where the unit of assessment is the Imperial gallon of the strength of London proof, the duty shall be increased or reduced in proportion as the strength is greater or less than London proof.







22(6)
Denatured spirit
Revenue.
11¼ per cent, ad valorem.
—
—
Free


24
Tobacco manufactured, not otherwise specified
Revenue.
Rs. 4–8 per lb.
—
—
—


24(1)
Cigars
Revenue.
135 per cent, ad valorem.
—
—
10 per cent, ad valorem.


24(2)
Cigarettes
Revenue.
25 per cent, ad valorem and in addition either Rs. 8–2 per thousand or Rs. 3–4 per lb. whichever is higher plus one-fifth of the total duty.
—
—
—


24(3)
Tobacco, unmanufactured†
Preferential revenue.
Rs. 3–141/5 per lb.
—
Rs. 3–141/5 per lb.
12 per cent, ad valorem.


* Under Government of India, Finance Department (Central Revenue), Notification No. 33, dated the 22nd June, 1935, as amended subsequently, ale and beer in containers other than bottles are exempt from so much of the duty as is in excess of the duty that would have been leviable if such containers were bottles.


† Under Government of India, Finance Department (Central Revenues), Notification No. 33, dated the 22nd June, 1935, tobacco leaf for the manufacture of cigars when proved to have been imported for use in a cigar factory is liable to duty at Rs. 2–64/5 per lb. (standard) and Re. 1–124/5 per lb. (preferential).

Canteens (Prices)

Mr. Leslie: asked the Secretary of State for India what further steps he has taken to provide in N.A.A.F.I. canteens in India meals for British soldiers who now have to pay high prices to private contractors much in excess of the cost of meals in Britain.

Mr. Amery: In India the place of N.A.A.F.I. is taken by Canteen Services (India). This organisation is not run by individual contractors on a profit-making basis, but is administered by a Board of Control through a Canteen Directorate and is financed by the Government of India. Prices are fixed by the Quartermaster-General in India in the case of every item except fresh perishables and raw materials required for the tea and supper trade, prices of which are fixed by the local commanders in conformity with those ruling in the vicinity. In view of the widespread misapprehension which prevails on the subject I wish to emphasise that contractors have no say whatever in policy, fixation of prices, or procurement of stores, and are merely the retail distributors of the Canteen Services (India) in non-operational areas.

Mr. Leslie: Is the Minister aware that it costs the soldier 5s. 3d. a day as against a maximum of 2s. 6d. in this country, and why should there be that difference?

Mr. Amery: I do not think that that is the case. Some articles may be dearer, but others are substantially cheaper.

Mr. Astor: Is it not a fact that the prices in these canteens are higher than those in American canteens, and why should the British soldier with a lower rate of pay be made to pay more than the American soldier who has a higher rate?

Mr. Amery: I am not aware of that fact, but I shall be glad to look into it.

Mr. W. Edwards: In order that we can find out whether our troops are paying more in India than in this country, would my right hon. Friend be prepared to publish in the OFFICIAL REPORT the prices charged in India?

Mr. Amery: I will look into that.

Government Subsidies

Mr. Sorensen: asked the Secretary of State for India to what industrial and other organisations the Government of

India are giving or have agreed to give subsidies or financial assistance; what are the specific amounts; and under what conditions this is granted.

Mr. Amery: If the hon. Member would help me by making the object of his Question somewhat more explicit, I could make inquiries from the Government of India.

Mr. Sorensen: Is it really necessary to make it more explicit? Surely the right hon. Gentleman can find out what moneys are paid to voluntary and private organisations of an industrial or similar character? Is that outside the knowledge of the India Office?

Mr. Amery: Yes, Sir. The Government of India are responsible for the affairs of a continent and for a vast administration. They may be paying out subventions in various directions of which I would naturally not be informed.

Mr. Sorensen: Can I take it that subventions of a substantial character are being paid out to various organisations?

Mr. Amery: I am willing to make any inquiry if my hon. Friend will give me an indication of the directions in which he would like me to make inquiries.

Congress Leaders (Detention)

Mr. Sorensen: asked the Secretary of State for India whether, in view of the freedom now enjoyed by Mr. Gandhi, and the political contacts he has made since his release, the present detention of Congress leaders is likely to be reconsidered; and how many Congress leaders and members now remain in detention.

Mr. Amery: The release of Mr. Gandhi, which was ordered solely for reasons of health, has no bearing on the continued detention of the Congress leaders. The number of persons remaining in detention on 1st May was, 3,508.

Mr. Sorensen: Does not the right hon. Gentleman appreciate that, whatever may have been the motive for releasing Mr. Gandhi, he is politically free and is making political contacts; and that, as apparently no harm has been done by his release, others less important should also be released?

Mr. Amery: That is a matter of opinion.

Mr. Sorensen: In view of what I have said, should not the whole question be reconsidered at an early date?

Mr. Amery: I do consider all these matters.

Mr. Sloan: Are we to understand that the right hon. Gentleman has a completely shut mind in this matter and is not prepared to consider the whole question anew?

Mr. Amery: Not at this moment.

Major-General Sir Alfred Knox: Is it not the case that while the right hon. Gentleman knows the facts, his questioners do not?

Oral Answers to Questions — CIVIL DEFENCE

Home Security Circular

Mr. Lipson: asked the Secretary of State for the Home Department (1) if he proposes to enforce upon unwilling authorities the policy laid down in Home Security Circular No. 73/1944 that a member of a local authority should not be both a member of the emergency committee and a controller or sub-controller, paid or unpaid;
(2) which regional commissioners he consulted before he issued Home Security Circular No. 73/1944, which lays down that a member of a local authority should not be both a member of the emergency committee and a controller or sub-controller, paid or unpaid.

Mr. H. Morrison: All the regional commissioners were consulted before the issue of this circular and I have advised local authorities to refer to them when they are in doubt whether changes are necessary in their arrangements to bring them into reasonable conformity with the terms of the circular. The regional commissioners are in a position to advise them, and I have little evidence at present of general unwillingness on the part of local authorities to accept that advice. Indeed, Press reports suggest that many authorities have already welcomed the guidance given. I should be reluctant to make any statement at this stage which seemed to imply that local authorities in general were not in agreement with the principles enunciated or that any compulsion should be necessary on my part. But I do attach importance in principle to a distinction

being drawn between a member of a policy-making and directing local authority committee on the one hand and an executive officer responsible to the committee on the other.

Mr. Lipson: If a local authority satisfied the regional commissioner that a change was undesirable, he would not insist upon the change taking place?

Mr. Morrison: I do not wish to commit myself to that extent. A local authority is perfectly free to make representations, and if there is an exceptional case it will be considered.

Mr. Austin Hopkinson: Is it not far more important that regional commissioners and their deputies should not be prospective Labour candidates for constituencies?

Mr. Morrison: There has never been an embargo upon a regional commissioner being either a Member of Parliament or a candidate, and I must say I think it is a little wrong on the part of my hon. Friend to single out one political party?

Mr. Hopkinson: The right hon. Gentleman says that I am wrong; will he explain in what respect?

Mr. Morrison: In picking on one political party.

Fire Prevention (Churches)

Mr. Keeling: asked the Secretary of State for the Home Department whether any special instructions have been issued to local authorities for fire-watching at churches.

Mr. H. Morrison: Under the Fire Guard Orders issued last year, the same provision was made for fire prevention at churches as for business premises and the instructions issued to local authorities cover both classes of premises.

Sir W. Davison: As church fires generally occur in the roof, could not my right hon. Friend see that something in the nature of a permanent ladder is fixed in churches, so that the fire hose could be made to reach the roof? Frequently, when fire occurs, there is nothing which can carry the hose up to the roof to stop the burning.

Mr. Morrison: I will keep that point in mind. I think that is usually provided for.

Oral Answers to Questions — LOCAL GOVERNMENT ELECTIONS

Mr. Mander: asked the Secretary of State for the Home Department if he will consider the advisability of permitting the measure postponing local government elections to lapse in the autumn, so that electors may have the opportunity of choosing their own councillors; and if he will introduce any necessary legislation.

Mr. H. Morrison: I recognise that in the view of my hon. Friend the advantages of holding local elections outweigh the reasons for which Parliament decided last December to renew the suspending Act for another year, but I do not think that since the date when Parliament took that decision there has been such a change in the circumstances as would justify the Government in making a definitive statement at the present time.

Mr. Mander: Does not my right hon. Friend agree that we are approaching a period when town councils might be allowed to become once more democratic bodies, and will he bear that in mind in coming legislation?

Mr. Morrison: Yes, Sir, I will keep that in mind. We are approaching some future period which must raise that question in an acute form.

Mr. Hugh Lawson: Is not the right hon. Gentleman aware that a large number of persons who had previously been rejected by the electors have been co-opted on to local councils?

Oral Answers to Questions — RELEASED CONVICTS (PRESS PHOTOGRAPHS)

Sir William Davison: asked the Secretary of State for the Home Department whether his attention has been called to the publication in the Press of photographs of convicts on their release from prison after serving often a long sentence, full particulars being given of the crime in respect of which they had been punished; and whether he will introduce legislation to stop this practice as it is an obstacle to a convict in making a fresh start.

Mr. H. Morrison: I need hardly say that I greatly deplore publicity of this kind. The great majority of newspapers recognise the considerations to which my hon. Friend calls attention and avoid such publications, and there will I am sure be

general agreement that this standard is to be commended and ought to be universal. I do not think that there is a case for legislation on this subject.

Sir W. Davison: Does not my right hon. Friend agree that it is exceedingly unfair, when a man has paid the penalty of an offence, and is endeavouring to start life anew, that he should be pilloried, and the whole of his past life published, together with photographs showing his wife meeting him at the gate of the prison?

Mr. Morrison: Yes, Sir, I agree with my hon. Friend.

Mr. Benson: Does not any newspaper which does anything of that kind lay itself open to heavy damages for libel?

Mr. Morrison: I am afraid I could not say, as I am not an authority on the complicated law of libel.

Oral Answers to Questions — POLICE (DETACHMENT ALLOWANCE)

Mr. De la Bère: asked the Secretary of State for the Home Department whether, when regular and auxiliary policemen are sent as reinforcements to other forces, he will consider allowing the auxiliary constables to receive the 3s. a day or 21s. a week which is paid to the regular constables, under Police Regulation 72, being the detachment allowance, since the auxiliaries are required for the same purpose as the regular constables.

Mr. H. Morrison: Members of the regular police who are sent on reinforcing duties are paid detachment duty allowance by virtue of the long-standing conditions of service which apply to them as regulars. Members of the war-time auxiliary police, like the regular police, are in such circumstances given free board and lodging or an allowance in lieu and are thus not put to additional expense. I can see no sufficient justification for the payment of an additional detachment allowance to auxiliaries whose conditions of service are not assimilated to those of the regular police.

Mr. De la Bère: Does not my right hon. Friend appreciate that it is urgently necessary to have a review of the pay and conditions of the auxiliary police, in view of the difficulties which confront some of these men in maintaining their families on the existing rate of pay and allowances?

Mr. Morrison: That is another question.

Mr. De la Bère: But it all has a direct bearing in the matter.

Oral Answers to Questions — ELECTORAL REGISTER (TEMPORARY LEGISLATION)

Mr. Bellenger: asked the Secretary of State for the Home Department whether he has prepared any electoral registration regulations for submission to Parliament; and when he proposes to lay them before the House.

Mr. Mander: asked the Secretary of State for the Home Department when the new electoral register will be ready for use.

Sir Richard Acland: asked the Secretary of State for the Home Department when he expects to be able to name the appointed day in relation to the Parliament (Elections and Meetings) Act, 1943.

Mr. H. Morrison: I propose to make a statement on this subject at the end of Questions.

Later—

Mr. H. Morrison: The regulations are in an advanced state of preparation, but it has been necessary to defer their completion because the electoral registration officers for Parliamentary counties in England and Wales have represented that, owing to shortage of staff and wartime difficulties, they will in many places be unable, in present circumstances, to produce electoral registers, unless the procedure prescribed by the Act of 1943 is simplified. The Act provides that the qualification for the civilian residence register shall be registration in the national register as residing continuously in a constituency for not less than two months before the qualifying date (i.e. the date on which the electoral records are frozen with a view to an impending election), and that, once a qualification has been acquired in one constituency, that qualification holds good until a qualification is acquired in another constituency. These provisions entail an intricate series of arrangements to ensure that newcomers to a constituency are not recorded as qualified for inclusion in the electoral register until each of them has had the requisite two months' continuous residence, and

that persons leaving the constituency are not treated as disqualified until each of them has acquired a qualification elsewhere. The volume and complexity of the clerical operations required for these purposes would not present serious difficulty in normal times, but at the present time many electoral registration officers find that to recruit, train and supervise the necessary staff is beyond their resources and it must be remembered that failure in any one constituency to deal properly with arrivals and departures will affect the electoral records of all the constituencies from and to which such movements take place.
There will, I am sure, be general agreement that to postpone the introduction of the new system, with the result that by-elections must be fought on the obsolescent register of 1939, would be most undesirable: and after examining the position with care the Government have come to the conclusion that the only solution is to suspend for a time the provisions which complicate the registration arrangements. It is accordingly proposed to introduce at once a temporary Bill to substitute for the requirement of two months' residence a provision that a civilian shall be included in the electoral register if he is registered in the national register as residing in the constituency on the qualifying date, and to put back the qualifying date by one month, so as to ensure that newcomers to a constituency will have been, as a general rule, residing in the constituency for not less than a month before the date on which an election is initiated, i.e. the date on which a writ for a by-election is received, and therefore for not less than two-and-three quarter months before the date of the poll. The Bill will require the Secretary of State to bring this temporary scheme to an end as soon as he is satisfied that sufficient staff and facilities are available for the operation of the 1943 Act, and will provide that in any case it shall expire by 31st December, 1945, unless a Resolution is passed by each House of Parliament extending the date. The Bill will be available in the Vote Office to-day, and the Government hopes for the co-operation of the House in passing it into law without delay. I regret having to ask the House to amend an Act which was passed in November last, but I am satisfied that there is no other way of attaining the object we all desire, namely, a Register


which shall be available at an early date and shall be as fully representative as possible.

Sir Hugh O'Neill: Can my right hon. Friend say why it is that, apparently, these difficulties have arisen in the counties but not in the boroughs, and can he also say whether his proposal is intended to apply only to by-elections?

Mr. Morrison: I do not know that it does not apply in the boroughs, but I agree that the representations I have had have come from the counties, as the situation is more serious there. Why that should be, I cannot be sure, except, perhaps, that the staffing arrangements of the counties are not so easy in solving this problem as in the cities and boroughs. I imagine that that is so. With regard to this Amendment, which will, I trust, only apply to by-elections, I hope that by the time a General Election comes in the offing—as to which I have no knowledge—the labour situation will be easier, in which case I will bring the Act to an end. I do not wish to make an absolutely final promise, but I can assure the House that I will bring this amending Act to an end as soon as it becomes practicable to do so.

Mr. Bellenger: As these complications have arisen, and the Home Secretary is introducing legislation mainly to deal with by-elections, may I ask if he is also aware that considerable complications have arisen in the Services; and, as the Services are interested in by-elections just as much as civilians, will he take steps to include in his amending Bill some simpler procedure so that Service electors can be registered more accurately than they have been before?

Mr. Morrison: This Bill will apply to civilian voters, and I am afraid I cannot extend its scope.

Mr. Mander: While recognising that it will depend on the passage of the Bill, can my right hon. Friend say the approximate date on which the new register will come into operation?

Mr. Morrison: Of course, it is dependent, as the hon. Member has indicated, on the day when the Bill reaches the Statute Book, but I should hope that the appointed day can be fixed on a date

about two months after the date on which the Bill comes into operation.

Sir R. Acland: The Minister did not seem to me to answer Question No. 21. If regulations are to be made under the Bill which is to come before the House, will the right hon. Gentleman follow the practice which is usual on these matters now and consult hon. Members before the regulations are actually made public, as, by that time, the matter has gone past our control?

Mr. Morrison: I do not think we did on the occasion when the present regulations were made, but, if we did, I will certainly give the point consideration. I do not know whether any difficulty arises there, and, of course, I am anxious that there shall be no needless delay, but I will give the point consideration.

Sir Percy Harris: While I recognise the character of the problem before the right hon. Gentleman, does he realise that it tackles only this question of the civilian voter, and ignores the Service voter, and that that might give a false impression that the right hon. Gentleman is more interested in the one than the other? Will he consider introducing legislation to deal with the problem of the Service man?

Mr. Morrison: I think it would be undesirable to confuse the two things. This is, primarily, for by-elections, and, clearly, that issue does not arise there. [Interruption.] Well, I am not sure, but I do not think it is administratively practicable. However, that argument can be saved for another day. If I try to bring into this Bill whatever complications exist on the Service side, I shall only delay the Bill, but it has been arranged this morning that a deputation of all parties is to see the three Service Ministers and myself on the problems in the Services, about which hon. Members are anxious, and I think it will be better for that discussion to be continued at the next stage by that deputation.

Sir Ralph Glyn: May I ask the right hon. Gentleman a question, being unaware of any deputation going to see him? He must be aware that the dates fixed for the registration of Service people were at a time when it was quite impossible for the conditions to be carried out. In these circumstances, there is considerable feeling in the Services that the


men will not be able to vote, as was intended, mainly owing to circumstances over which they and their commanding officers have no control?

Mr. Morrison: I must remind the House that I am not a Service Minister in this respect and that this is, primarily, a matter for the Service Ministers. But I am aware of the anxiety in the matter and that is why I wished to proceed. I think the matter had better proceed by deputation, and I will, with the Service Ministers, endeavour to get on as fast as we can.

Mr. Granville: In view of the fact that the Government appear to be planning a khaki coupon election, would it not simplify the matter, if the Government arranged for a national referendum upon the adult vote?

Mr. Morrison: I do not know anything about a coupon election. I am a member of the War Cabinet, but I did not know anything of that before.

Commander King-Hall: When the appointed day has been settled, will the Government see that the new register will be made available?

Mr. Morrison: As and when a by-election occurs, the register will be made available. It will not be available otherwise.

Commander King-Hall: Arising out of that reply, has the right hon. Gentleman taken steps to inquire the length of time it will take to prepare these copies; and will he inquire into it, because the same difficulties may arise in counties, where it may take up to three weeks to get the lists ready?

Mr. Morrison: These physical difficulties will exist just the same, but the object is to make the first copies of the register more quickly than would otherwise be the case. There is bound to be more serious delay between the issue of the writ and polling day than there was before.

Mr. Quintin Hogg: Having regard to the fact that the difficulty, apparently, is limited to some of the counties, why is it that the necessary labour force, which I calculate could not exceed 1,000, cannot be made available, instead of abolishing the residence qualification, to which some of us attach considerable importance?

Mr. Speaker: That is another question.

Mr. Driberg: In one of his supplementary answers just now, did the Home Secretary imply that, when the new register is in operation at by-elections, it will not be administratively possible for Servicemen who are constituents in the particular constituencies to vote?

Mr. Morrison: Perhaps I said more than I ought, or less than I ought—I am not quite sure—but I do not recollect precisely what the position of the Servicemen in a by-election is. Perhaps if that question is to be pursued, it had better be put down, when I shall really know what I am talking about.

Mr. McGovern: Is the Home Secretary aware that there may be contests in which the Service men and women will determine the result; and is it not the case that the Service men and women in these circumstances ought to be given the vote and ought he not to see that they get it?

Mr. Morrison: My hon. Friend has not any more enthusiasm for members of the Services than any other Member of the House. We are all absolutely united in wanting the Service people to have the maximum opportunity for expressing their views at elections.

Oral Answers to Questions — PARLIAMENTARY FRANCHISE (SERVICE REGISTER)

Sir Geoffrey Shakespeare: asked the Secretary of State for the Home Department what new method of qualification for voting the Government proposes to adopt in view of the failure of millions of Service personnel to complete the necessary forms qualifying them to vote at the next. General Election.

Mr. H. Morrison: I cannot accept the assumption on which my hon. Friend bases his Question. The process of transmitting Service declarations to the electoral registration officers is still in its early stage, and it is too soon to estimate what proportion of members of the Forces will or will not make use of the facilities for exercising the franchise made available by the Act of 1943. I need hardly point out that the attention of all three Services is being heavily engaged at present in other directions.

Sir G. Shakespeare: In view of the fact that the machinery has broken down, through nobody's fault, would my right hon. Friend agree to receive an all-party deputation from Members who have considered this question, like my hon. Friend the Member for Oxford (Mr. Quintin Hogg) and others?

Mr. Morrison: My hon. Friend will, no doubt, appreciate that the responsibility for the Service aspect of the matter rests upon the Service Ministers; but, if there was an indication that Members representing all parties in the House wished to see the Service Ministers, possibly with myself present, I would endeavour to make arrangements accordingly.

Mr. Bellenger: Although responsibility is on the Service Ministers to obtain a register of members of the Services, is there not also responsibility upon the right hon. Gentleman, as Home Secretary, to see that the register is as complete as possible? Will he take action towards that end?

Mr. Morrison: My hon. Friend is wrong. There is a statutory responsibility on the Service Departments, within this sphere, but we cannot get into a position in which one Minister is running another Minister. I will follow my own responsibilities, which are rather different, and I will be helpful in respect of the others, but it is impossible for one Minister to be held responsible for the statutory responsibilities of other Ministers.

Mr. Ellis Smith: When the time is opportune, could not my right hon. Friend ask the Service Ministers to meet him, to see what more can be done?

Mr. Morrison: Certainly, I will keep that suggestion in mind. If the idea of an all-party deputation to the Service Ministers, with myself present, is proceeded with, I think that my hon. Friend's suggestion might well be associated with it.

Mr. Bowles: Would it not be a good idea if members of the Services who do not register could be put on the electoral registers of the Service Ministers in their own constituencies?

Mr. Sorensen: Does not the Home Secretary recognise that, normally, he would be responsible for the civilian register and

that the Service Ministers are now acting in a way for him? Does he not appreciate that the fact that a large percentage of Service personnel have not signed forms, is a definite menace to the future of democratic government.

Mr. Morrison: That is a good try on, on the part of my hon. Friend, but I must point out that we have not reached the stage when one Minister bosses another, or when one Minister takes responsibility for another Minister's Department.

Oral Answers to Questions — UNITED STATES FORCES, GREAT BRITAIN (DEATH SENTENCES)

Mr. Rhys Davies: asked the Secretary of State for the Home Department if he will state the number of persons sentenced to death in this country by foreign powers; and how many of these have been executed on British soil.

Mr. H. Morrison: I am informed that sentence of death has been passed on fourteen members of the United States forces by United States courts-martial in the United Kingdom. In three cases the sentence has been commuted to life imprisonment; four cases are still subject to review; and in seven cases the sentence of death has been carried out by the United States authorities in this country. In every case in which the death sentence has been carried out the offence charged has been murder; in one of the cases rape had been committed as well as murder. So far as I am aware no sentence of death has been passed in this country by the courts of any other foreign Power but their courts-martial do not try cases of murder, manslaughter or rape.

Mr. Rhys Davies: Would the right hon. Gentleman say whether all those who have been sentenced to death were negro soldiers, or whether there were any whites among them?

Mr. Morrison: I could not say without notice.

Oral Answers to Questions — CONSCIENTIOUS OBJECTOR (PROSECUTION, LEWES)

Mr. Rhys Davies: asked the Secretary of State for the Home Department on how many occasions George Elphick, 66, Priory Street, Lewes, a registered conscientious objector, has been prose-


cuted at Lewes police court for refusing fireguard duty and with what results; what has been the cost of the prosecutions to date and on whom has it fallen; whether he will give an assurance that no Government contribution has been made or will be made towards such costs; and whether he will take powers to prevent such persecution, which was deprecated by the regional commissioner in October, 1942.

Mr. H. Morrison: This man has been before the magistrates seven times and was convicted on six occasions. Particulars of the cost of the prosecutions are not at present available, but the local authority has been informed that no grant from the Exchequer will be made towards expenditure on proceedings commenced against him after 8th October, 1942. As regards the last part of the Question, I would refer my hon. Friend to my answer of 9th December last.

Mr. Rhys Davies: While thanking the right hon. Gentleman for the action which he has already taken in this case, may I ask whether it is possible for him to take some further steps to prevent an obvious waste of public money and the time of the courts, in what is tantamount to absolute persecution?

Mr. Morrison: These cases are often difficult to understand. I have tried, in the special circumstances of this case, to be as helpful as I can and I will do so, but I do not think I ought, so to speak, to usurp directly the functions of the local authority in the matter.

Earl Winterton: Could not the right hon. Gentleman make it quite clear that local authorities are not to be interfered with by Questions in this House, in the carrying out of their duties under the law?

Mr. Morrison: I think that point is covered by the answer which I have given.

Oral Answers to Questions — EDUCATION

Expenditure

Sir John Graham Kerr: asked the President of the Board of Education what is the total expenditure, capital and annual, upon school education in England and Wales envisaged under the Education Bill now before Parliament.

The Parliamentary Secretary to the Board of Education (Mr. Ede): The total annual expenditure estimated to fall on public funds, including the cost of the reforms envisaged in the Education Bill, is shown in Table II of the Financial Memorandum attached to the Bill as presented to Parliament. As regards the estimated additional capital expenditure referable to the reforms, I would refer my hon. Friend to the reply given by my right hon. Friend to the hon. Member for Chippenham (Mr. Eccles) on 1st February, a copy of which I am sending him. The annual charges on this capital expenditure are included in the figures given in the Tables in the Financial Memorandum.

Mr. Lipson: Do the figures the right hon. Gentleman has given provide for any substantial increase in the salaries of teachers?

Mr. Ede: They provide for an increase in the salaries of teachers. Whether an increase is substantial or not varies very much, according to the point of view of the recipient or the giver.

Sir J. Graham Kerr: asked the President of the Board of Education what is the amount of expenditure upon school education in England and Wales provided from scources other than Governmental, central or local.

Mr. Ede: Up-to-date information is not available. The latest Return of Expenditure on the Public Social Services (Cmd. 5906) shows that in 1936–37 the total receipts, other than receipts from rates and taxes, in respect of services falling under the Education Acts amounted to £7,999,000. This figure is exclusive of the receipts by way of fees and endowments in schools and institutions not provided by local education authorities. These, in the case of aided and direct grant secondary schools, which represent a very large part of such receipts, amounted in 1936–37 to rather over £2,000,000. The Board have no corresponding information in regard to independent schools.

Young Persons (Earnings)

Sir J. Graham Kerr: asked the President of the Board of Education if he can give an estimate, however rough, of the cost to the country involved in


persons between the ages of 14 and 16 years being excluded from productive employment.

Mr. Ede: I am afraid that I cannot give the desired estimate, as there are no statistics relating to the earnings of young people of 14 and 15 separately from the earnings of other age-groups.

Road Safety Training

Sir W. Davison: asked the President of the Board of Education, in connection with the road casualties for April, numbering over 10,000, of which fatalities to children numbered approximately five a day, what are the precise measures which have been taken by his Department to secure that the head teachers of all schools throughout the country are impressing upon the children in their schools the serious dangers of lack of care in crossing highways and generally explaining the rules of the road.

Mr. Ede: I am sending my hon. Friend copies of four official documents in which my Department have drawn the attention of authorities to the need for including road safety training as a definite and regular part of the curriculum in all schools. A new film on road safety produced by the Ministry of Information in collaboration with the Ministry of War Transport and the Board of Education specially for showing to children has recently been made available to local education authorities.

Sir W. Davison: Does not all this relate to post-war training? When five children are being killed every day surely some special request should be made now to local education authorities throughout the country that, each day, for say a couple of months, the head teacher should draw the attention of the children on assembly at the school to the great danger of road accidents?

Mr. Ede: May I say to my hon. Friend that, to my knowledge, frequent reference is made to this matter in schools, and all kinds of practical demonstrations and exercises are given, but I venture to say that if the same thing were said every day for two months, long before the end of the first month the children would be paying attention to something other than the words of the teacher.

Mr. Gallacher: Is it not the case that the real problem in connection with road fatalities to children is the urgent need for an extension of playing fields for the children, and does that not raise the question of taking over the land?

Oral Answers to Questions — HOSPITALS (FOOD SUPPLIES)

Mr. Higgs: asked the Minister of Food if he is aware that the allotment of food for military casualties admitted to civilian 'base hospitals is inadequate, and will he make arrangements to supplement it forthwith.

The Parliamentary Secretary to the Ministry of Food (Mr. Mabane): Arrangements have already been made, in consultation with my right hon. Friend the Minister of Health, to enable hospitals with a substantial proportion of Service patients to obtain an additional allowance of meat.

Mr. Higgs: Is my right hon. Friend aware that in a certain Midland hospital the first convoy ate the whole of a week's meat ration on the first evening? I hope he will considerably increase the meat ration.

Oral Answers to Questions — PUBLIC HEALTH

Tuberculosis Statistics

Mr. McNeil: asked the Minister of Health if he will state the number of deaths from pulmonary and non-pulmonary tuberculosis, and the number of cases notified, in England and Wales and in Scotland during 1943, giving the sexes separately; will he give the comparable figures for 1938 to 1942; and whether any age-groups have been especially affected in any increases that may have taken place recently.

The Minister of Health (Mr. Willink): As the reply involves a number of figures I will, with permission, circulate it in the OFFICIAL REPORT.

Mr. Rhys Davies: Will the Minister be good enough to publish what is called the Annual Report of his Department, which would contain these statistics?

Mr. Willink: The statistics asked for will be in HANSARD to-morrow.

Following is the reply:

The following table in which the particulars relating to Scotland have been supplied by my right hon. Friend the Secretary of State, gives the information for which my hon. Friend asks.


Tuberculosis Deaths.


Year.
England and Wales.
Scotland.


Pulmonary.
Non-Pulmonary.
Pulmonary.
Non-Pulmonary.


Male.
Female.
Total.
Male.
Female.
Total.
Male.
Female.
Total.
Male.
Female.
Total.


1938
…
…
12,445
8,837
21,282
2,261
1,996
4.257
1,396
1,185
2,581
435
416
851


1939
…
…
12,702
8,840
21,542
2,229
1,852
4,081
1,506
1,211
2,717
411
398
809


1940
…
…
13,920
9,740
23,660
2,381
2,103
4.484
1,669
1,368
3,037
486
480
966


1941
…
…
13,985
9,648
23,633
2,653
2,384
5,037
1,646
1,471
3,117
516
542
1,057


1942
…
…
12,511
8,478
20,989
2,426
2,134
4,560
1,561
1,482
3,043
473
482
955


1943
…
…
13,064
8,276
21,340
2,218
2,092
4,310
1,581
1,395
2,976
473
510
983





Notifications.


1938
…
…
21,302
16,577
37,879
6,511
6,299
12,810
2,603
2,190
4793
1,369
1,403
2,772


1939
…
…
19,695
15,235
34,930
5,660
5,616
11,276
2,432
2,225
4,657
1,202
1,238
2,440


1940
…
…
20,988
15,163
36,151
5,272
5,149
10,421
2,720
2,492
5,212
1,240
1,270
2,510


1941
…
…
23,147
16,352
39,499
5,819
5,646
11,465
3,002
2,737
5,739
1,255
1,300
2,555


1942
…
…
23.623
17,006
40,629
5,937
6,053
11,990
3,272
2,952
6,224
1,342
1,482
2,824


1943
…
…
—
—
42,458
—
—
11,934
3,730
3,485
7,215
1,408
1,465
2,873


Notes. Table for England and Wales. The figures for 1943 are provisional only; separate figures for males and females are not yet available. Comparison of the deaths from pulmonary tuberculosis by age groups in 2943 with those in 1939 shows that increases occurred amongst children under 15 and amongst men at each age group over 35, whereas decreases occurred amongst women of each age group.


Table for Scotland. Age groups specially affected by recent increases in pulmonary tuberculosis are:


Under 5 (M. and F.), 10 to 25 (F.), 15 to 25 (M. and F.), and 25 to 35 (M. and F.).


There are no age groups specially affected by increases in non-pulmonary tuberculosis.

Water Pollution (Toddington)

Mr. De la Bère: asked the Minister of Health whether he will make an investigation regarding the effluent from the canning factory at Toddington, which is alleged to have been causing serious pollution of the Washbourne and Carrant brooks, which in part run through the Evesham rural district territory; and what steps he proposes to take to remedy the pollution, which, apart from being a public nuisance, is a serious danger to cattle on the farms through which the brooks pass.

Mr. Willink: I am aware of the pollution of the streams from the factory effluent and the matter was last investigated by one of my officers on 12th April. The company responsible has carried out temporary works to remedy the position, and I am advised that the effluent is now much better but that the pollution of the stream is aggravated by the condition of the bed of the stream, which should be cleaned out. The necessity for this work has been brought to the notice of the Gloucestershire War Agricultural Executive Committee, who have the matter in hand. The company's technical advisers are in touch with the Director of the Water Pollution Research Laboratory of the Department of Scientific and Industrial Research. I shall continue to keep the position under review.

Mr. De la Bère: Is my right hon. and learned Friend aware that recent samples taken after the experiments and so-called improvements had been made by the company, showed no improvement whatever; and is he not aware that the Cheltenham rural district council put forward a comprehensive scheme to deal with this nuisance which was turned down by the Minister and his Department on the grounds of expense? The matter is one of vital urgency, and does not seem to have had proper attention.

Mr. Willink: It was not turned down on the ground of expense alone but also on grounds of efficiency. Potato canning, which causes particular difficulty in the matter of effluent, is not going on there at the moment. The company are doing their very best and I hope that progress will be made.

Mr. Marshall: Will the Minister ensure that any expenses incurred in purifying

this stream, will be placed upon those who polluted it?

Mr. De la Bèere: I am not satisfied, and I beg to give notice that I shall raise the matter at the earliest opportunity.

Oral Answers to Questions — HOUSING

Sites (Grouping Scheme)

Sir A. Knox: asked the Minister of Health whether he will reconsider the policy of grouping local authorities for the advance preparation of housing sites as, in effect, this policy results in the overburdening of a few selected large contractors who are given priority for material and labour, while similar facilities are withheld from the smaller firms which would be employed by individual local authorities.

Mr. Willink: I would refer my hon. and gallant Friend to the reply, of which I am sending him a copy, which I gave on 8th June to questions on this subject.

Sir A. Knox: Does the Minister not consider that, apart from its gross unfairness to the small contractor, this scheme is unsound, as the individual local authorities will not have charge of the houses when they are built?

Mr. Willink: I should not have given the advice I did, if I had thought the scheme was unsound. I assure my hon. and gallant Friend that a small contractor who can do the work with equal economy will have complete fairness, and quite small schemes are in fact being authorised now. This has nothing to do with the actual building of houses. This is an attempt to get the sites prepared with the utmost economy and speed during the progress of the war.

Mr. Bossom: Will the Minister give an assurance that this same policy of excluding small builders will not continue when it comes to building the houses themselves?

Mr. Willink: I have no intention of a scheme of this nature applying to the building of houses.

Sir Leonard Lyle: asked the Minister of Health whether, if local authorities reject his advice regarding the aggregations of contracts and the employment of large scale contractors, he will give


an assurance that this decision will in no way affect the right of such authorities to enjoy equal priority in respect of the provision of labour and materials if they prefer to engage a medium or small sized builder.

Mr. Willink: As explained in the reply which I gave to the hon. Members for Great Yarmouth (Mr. Jewson), Peterborough (Viscount Suirdale), and Chislehurst (Sir W. Smithers), on 8th June, the object of the grouping scheme is to ensure the maximum saving in cost and labour. The scheme is a voluntary one, but it will be my duty in considering tenders submitted for my approval to satisfy myself that the work will be carried out in the most economical way. Subject to that, as I have already explained, every facility will be given to approved contracts.

Sir L. Lyle: Is my right hon. and learned Friend aware that there will be many small builders seeking to re-establish themselves at a most difficult time; and will he do everything that he can to encourage that laudable aim?

Mr. Willink: That is both my appreciation of the situation, and my intention.

Homes for the Aged

Mr. Rostron Duckworth: asked the Minister of Health what advice his Department has issued to local authorities on the establishment of small colonies of homes for the aged; and whether he is aware of the practicability of such a scheme.

Mr. Willink: Advice as to the need for special small dwellings for old people and as to the type of dwelling best suited to their requirements has been issued to local authorities on a number of occasions by circulars, housing manuals and otherwise. Further advice on the location and planning of such dwellings will be included in the forthcoming new manual, following the report of the Design of Dwellings Sub-Committee of my Central Housing Advisory Committee. About 48,800 special dwellings for old people have already been built by local authorities and many of them are in groups or colonies.

Mrs. Hardie: Will the Minister take note that elderly people do not want to be segregated, and that what they would

desire is to have their smaller houses incorporated in housing schemes?

Mr. Willink: I took it that the expression "colonies" meant groups rather than separate and segregated units.

Evacuated Military Buildings

Mr. Sorensen: asked the Minister of Health whether, in view of the houses heretofor used for military purposes now becoming vacant through the departure of troops for the Continent, he is taking any further action to see that those houses are occupied by civilian families or are put at the disposal of local authorities for this purpose.

Mr. Willink: This important matter is receiving close consideration, and I am conferring with my right hon. Friend the Secretary of State for War about it.

Mr. Sorensen: Do I understand that some kind of direction will be given that, when that happens, the houses shall be passed over to the authorities for civil purposes?

Mr. Willink: That is, quite obviously, the matter on which I am consulting with the Secretary of State.

Cottages, Somerset

Mrs. Tate: asked the Minister of Health when it is anticipated that the four agricultural cottages being built at Wan-stern, Somerset, by the Frome Rural District Council, and due for completion last March, will be ready for occupation.

Mr. Willink: The cottages are roofed in. I am making inquiry when they are likely to be ready for occupation, and will let my hon. Friend know the result in the course of a few days.

Mrs. Tate: Is the right hon. and learned Gentleman aware that it is the opinion of the district council that the cottages cannot possibly be finished before next December, and that had they been left with greater freedom the cottages could have been completed by December last? This is costing a great deal of money, and the position is extremely unsatisfactory. Will the Minister look into the Essential Work Order with regard to it?

Mr. Willink: The progress of all these cottages is being closely watched, but I am not sure that the council itself has proceeded with all expedition.

Mrs. Tate: asked the Minister of Health what has happened to the 16 windows ordered for houses being built by the Frome Rural District Council, at Wanstern, which were put on the railway for delivery last November.

Mr. Willink: It seems clear that the windows have been lost in transit. Arrangements have been made for another consignment to be sent by passenger train.

Oral Answers to Questions — WATER SUPPLIES SCHEME (COMPENSATION)

Lieut.-Colonel Heneage: asked the Minister of Health whether the catchment board was consulted before compensation water was cut down for the benefit of the water supply of a certain area, of which the name has been supplied to him; if a public inquiry was held; and to what extent it is his intention to interfere with compensation rates settled by Acts of Parliament.

Mr. Willink: I apologise to the House for the length of the reply—

Hon. Members: Circulate it.

Mr. Speaker: Perhaps it is the wish of the House that the right hon. and learned Gentleman should make his statement at the end of Question Time?

Hon. Members: Hear, hear.

Later—

Mr. Willink: In this instance it was represented to me by the water undertaking concerned that, owing to lack of rainfall, a reduction of compensation water would be necessary if they were to be able to meet prospective requests, later in the year, for emergency supplies to certain other undertakings covering important areas. Normally, a local inquiry would have been held, of which due notice would have been given to the catchment board and other interests. It became evident, however, that, owing to the rapid falling in the level of the reservoir, due to the lack of rainfall, delay in taking action would, for technical engineering reasons special to the particular case, render the proposed action abortive. In these circumstances, I departed from my usual practice to the extent of making an interim Order, on 3rd June, to come into operation forthwith as a

matter of urgency. The catchment board and others concerned were at once notified, and given full opportunity to make representations by 30th June, as to the period of operation of the Order. I have already received an intimation from the catchment board that they would wish to be heard on the question of renewal of the Order, which is at present due to expire on 31st July, and I am arranging for a local inquiry to be held early next month.

Lieut.-Colonel Heneage: Can my right hon. and learned Friend say that all the suitable local interests, such as the agricultural interests, will be consulted? I am sure that he is aware that it is a very serious thing, for cattle and other things, that the compensation water should be cut down.

Mr. Willink: I appreciate that this is a serious and unusual measure to take. It is within a power similar to one given in rather similar circumstances in 1934. It was taken with due thought; and all those concerned have been notified and will have an opportunity of making their representations.

Oral Answers to Questions — NEWS BROADCASTS (ANNOUNCERS)

Mr. Lewis: asked the Minister of Information if his attention has been called to the fact that the one o'clock news bulletin on Monday last was broadcast by an anonymous member of the B.B.C.'s staff, instead of by one of the usual named announcers; and whether this means that, in the event of urgent instructions to the public, arising out of enemy action in this country, attention is to be paid to any broadcast, no matter whether the voice of the broadcaster is familiar to the public or not.

The Parliamentary Secretary to the Ministry of Information (Mr. Thurtle): I am assured by the B.B.C. that any urgent instructions to the public concerning enemy action in this country would be broadcast by someone whose voice is familiar to listeners.

Mr. Granville: Can my hon. Friend say whether some of the established B.B.C. announcers who were called up are still doing their work? Does he not think, in view of the splendid job that the B.B.C. are doing on the invasion, that it would be better to recall them?

Oral Answers to Questions — SITTINGS OF THE HOUSE (STANDING ORDERS)

Viscount Hinehingbrooke: asked the Prime Minister whether he will move an amendment to Standing Orders to enable the suspension of the rule governing the hour of Adjournment to be moved during the course of business in Committee of Supply.

The Secretary of State for Foreign Affairs (Mr. Eden): No, Sir. The power to suspend the Rule without notice on certain occasions was granted to the Government for the purpose of obtaining essential and urgent business. Business in Committee of Supply is regulated by Standing Order No. 14, and I do not think that the Government would be justified in asking for this extended power.

Viscount Hinchingbrooke: In arriving at this decision, has my right hon. Friend taken into account the fact that in several recent Debates, most important Debates, held in Committee of Supply, upwards of a dozen hon. and right hon. Gentlemen have not been able to be called? Cannot he somehow get over the technical difficulties involved, in order to facilitate an arrangement?

Mr. Eden: It is, of course, not a unique experience to fail to catch your eye, Sir. I do not think we can amend the Standing Orders on that ground. If I might explain in one sentence what the difficulty is, it would mean, in Committee, that Mr. Speaker would have to come back into the Chair, and then would have to leave the Chair in order that we could get back into Committee. That would be contrary to Standing Order No. 12. I think that we should be careful not to knock our Standing Orders about.

Oral Answers to Questions — AGRICULTURE

Quarrying (Land Restoration)

Wing-Commander James: asked the Minister of Agriculture whether his attention has been drawn to the announcement of the appointment of a consulting engineer by the Minister of Town and Country Planning to carry out a technical investigation of the possibilities of restoration of land damaged by quarrying for ironstone; and whether he proposes to take any steps to examine the possibilities of restoration of any such land for agricultural use.

The Minister of Agriculture (Mr. R. S. Hudson): Yes, Sir. This question has been under consideration by my Department for some time. With the help of the companies concerned, a number of plots were levelled, and crop and fertiliser experiments have been conducted by the Northampton War Agricultural Executive Committee on my behalf. These experiments are now in their second year. The problems are complex, but the results are sufficiently encouraging to justify the inquiry into the engineering problems of levelling which was announced by my right hon. Friend the Minister of Town and Country Planning. The whole matter is being handled jointly by our two Departments.

Second-Rate Pastures (Ploughing-up)

Mr. Price: asked the Minister of Agriculture whether, in view of the fact that many second-rate pastures cannot be ploughed up and directly re-seeded with satisfactory results, he will consider advising new methods of dealing with this type of land, which will involve longer periods of cultivation before re-seeding.

Mr. Hudson: It is part of the duty of county war agricultural executive committees and their district committees and technical staffs to give advice of the nature indicated.

Post-War Marketing

Mr. Price: asked the Minister of Agriculture whether he is considering reviving after the war, in some form, the marketing boards set up under the Agricultural Marketing Act, 1930.

Mr. Hudson: The whole question of future marketing arrangements is being considered in connnection with post-war agricultural policy generally.

Pig and Poultry Feeding-Stuffs

Mr. De la Bère: asked the Minister of Agriculture whether, in the case of W. Preston, Junior, of Derby House, Station Road, Broadway, Worcestershire, a regular soldier who served, for nine years overseas, was wounded in Egypt, and discharged from the Army with a small pension, he will amend the terms of Serial No. 1477, so as to permit this man, and other cases similarly situated, to obtain sufficient feeding-stuffs for pigs and poultry, to enable him to earn a livelihood and supplement his small war pension.

Mr. Hudson: The circular to county war agricultural executive committees, to which my hon. Friend refers, deals only with cases of men discharged from the Forces who were keeping pigs or poultry immediately prior to the war. Much as I regret it, I am afraid that the feeding-stuffs supply position at present does not enable me to extend its scope to meet cases such as that of Mr. Preston, who wishes to start pig keeping.

Mr. De la Bère: Does my right hon. Friend not appreciate the gross hardship to these men, who have done many years of loyal and devoted service to the country and are unable to supplement the very small pensions they have got? Will he not make some endeavour to give more feeding-stuffs, to enable them to supplement their small pensions?

Mr. Hudson: That is so; but I also am aware that many pig and poultry keepers, including many disabled men from the last war, are suffering great hardship, through our inability to supply them with feeding-stuffs. It would not be equitable to provide rations for newcomers, even if they are ex-Service men.

Oral Answers to Questions — ALLIED ADMINISTRATION, ITALY (OFFICIAL)

Mr. G. Strauss: asked the Secretary of State for War whether he is aware that the head of the Italian African police, a notorious Fascist, is now employed by the Allied administration in Rome; and whether he will take steps to see that neither this man nor any ex-Fascist leader shall be accredited any recognition by our occupying Forces in Italy.

The Financial Secretary to the War Office (Mr. Arthur Henderson): If my hon. Friend will give me the name of the alleged Fascist to whom he refers, I will have inquiries made. I can assure my hon. Friend that it is not our policy to accredit recognition to ex-Fascist leaders.

Mr. Strauss: Does not the fact that this man was, for a long time, the head of the Italian African police, sufficiently identify him? Is my hon. and learned Friend not aware that this matter was reported in the Press, by correspondents in Rome, early this week?

Mr. Henderson: I will make inquiries, but it would help us if my hon. Friend would supply us with the name of this man.

BUSINESS OF THE HOUSE

Mr. Arthur Greenwood: May I ask the Leader of the House what is to be the Business for next week?

Mr. Eden: The Business for next week will be as follows:

Tuesday, 12th June—Supply: Committee (12th Allotted Day). A Debate will take place on Housing and Health in Scotland.

Wednesday, 21st June, and Thursday, 22nd June—Debate on a Government Motion relating to the White Paper on Employment Policy.

Friday, 23rd June—Supply: Committee (13th Allotted Day). The subject for Debate will be announced later.

Mr. Greenwood: As the right hon. Gentleman will recollect, on the Beveridge Report we had three days, and in view of the range of problems which are bound to be discussed, does he think that two days will be adequate for the Debate on the White Paper on Employment Policy? I would suggest to the right hon. Gentleman that the House would very gladly approve of the Friday Supply Day being devoted to a continuance of the Debate.

Mr. Eden: If that were the feeling of the House, I think it could be arranged. In that case I would like Supply Committee to be taken formally, and the Debate could then continue for a third day. Subject to that arrangement, if the House wishes, I have no objection.

Mr. Greenwood: I suggest that that proposal would meet with the general approval of Members of the House and in that case we could have a continuous three days' Debate.

Commander Sir Archibald Southby: With reference to the Business for tomorrow, may I ask my right hon. Friend whether he has now had an opportunity of reading the new Motion which has appeared on the Order Paper in the names of my hon. Friend the Member for Gravesend (Sir I. Albery), myself, and other hon. Members?

[That this House is of opinion that the operation of Regulation 18B should now be reconsidered with a view to the amendment thereof and to the transfer to a judicial tribunal specially constituted, if need be, for the purpose of final responsibility for determining whether there is reasonable cause for detention under the said Regulation; and, in particular, that the detention of an honourable Member for over four years without trial or charge conflicts with the ancient and well-establighed right of the House to the service of its Members, deprives the electors of the honourable Member from proper representation, constitutes a precedent damaging to the prestige of the House and dangerous to the Constitution of the country and ought to cease unless justified to the House, if necessary, in Secret Session.]

May I further ask him whether he cannot now see his way to allow the Debate to take place on that Motion, and not on the Home Secretary's salary, in view of the fact that the House has, for some years, endeavoured to have a Debate on the clear-cut question of the detention of one of its Members—any Member? Further, Mr. Speaker, this Debate, if taken on a Vote in Supply, will take place with you not in the Chair. As this matter concerns the House and its rights, would it not be better that you, Mr. Speaker, should be in the Chair when it is debated?

Mr. Eden: I observed that the Motion has been put down by my hon. and gallant Friend and other hon. Members in place of the preceding Motion, and I think it will serve us as a guide in the matter we propose to discuss, but this Business was announced last Tuesday, and I am certainly not prepared now to make any change.

Sir H. O'Neill: With regard to the Debate to-morrow, in view of the fact that it will be extremely difficult for Members to come to a conclusion about why the hon. and gallant Member for Peebles and Southern (Captain Ramsay) is detained, without knowing something about the reasons, which have never yet been given, will it not be possible for some announcement of the reasons to be given, if necessary, in Secret Session?

Mr. Eden: I think it would be for the convenience of the House for the hon.

Member who put the Motion down to open the discussion and for my right hon. Friend to speak a little later. In the course of his speech my right hon. Friend will, no doubt, give his reasons why he cannot do that, but I do not want to anticipate what my right hon. Friend is going to say. I want to make it plain to my hon. and gallant Friend that the point will be dealt with by my right hon. Friend in his speech.

Sir R. Acland: May I ask the Leader of the House if he can find time next week for a discussion of the Motion put down by myself and three or four other hon. Members in regard to the Recognition of the Provisional Government of France?

[That in the opinion of this House the failure of His Majesty's Government to recognise the Committee of National Liberation as the Provisional Government of France and to secure its complete participation in the administration of liberated French territory, is inconsistent with the much more favourable treatment given to provisional Governments manifestly less representative of the peoples concerned; and the continuance of this policy must spread misunderstanding and dismay amongst the resistance movements of France and may diminish this enthusiasm for the manifold and dangerous acts of co-operation by which they can save the lives and speed the advance of the men of the Allied invasion force.]—[Sir R. Acland.]

Mr. Eden: No, Sir; what my right hon. Friend the Prime Minister said yesterday covers that point. If there are any new developments we shall, of course, take the earliest opportunity of letting the House know them. In reply to my hon. and gallant Friend the Member for Epsom (Sir A. Southby), I do not want there to be misunderstanding about to-morrow. Of course, we are dealing with my right hon. Friend's administration and it will be absolutely open to the House to express itself by vote or any other way just in the same way as if it was on a Motion.

Sir R. Acland: This Motion is put down by four or five hon. Members who have been elected to this House precisely by people who have no confidence in the Government in this kind of matter, and I give notice that to-morrow, when it is moved to adjourn till Tuesday next, I


shall oppose that Motion, so that we can meet on Monday to discuss the Motion in question.

Mr. McNeil: On the Scottish Supply Day, will the Leader of the House arrange for the Standing Order to be suspended so that Scottish Members may have an opportunity of debating adequately the matters to be discussed?

Mr. Eden: As I explained earlier at Question Time, it would be necessary to put a Motion on the Paper to make that possible. If there is a strong demand among Scottish Members, I shall be ready to consider that. But may I say that I watch with admiration their self-denying ordinance.

Mr. McNeil: May I remind the right hon. Gentleman that Members on this side of the House have already vigorously and unanimously made representations through the usual channels on this point?

Sir H. Williams: May I ask whether, in his speech to-morrow, the Home Secretary will deal with the constitutional issue of how we could solve the problem, should he, in a moment of mental aberration, decide to intern all his colleagues in the Government?

Mr. A. Bevan: Does the Leader of the House realise that by his device for tomorrow, and by taking a Supply Day formally next Friday, the House will have been effectively deprived of two Supply Days?

Mr. Eden: No.

Mr. Bevan: Yes, in effect, because we are actually taking to-morrow, on Supply, a Motion which ought to have been taken by itself as a substantive Motion. [HON. MEMBERS: "Not at all."] A very large number of hon. Members do think so. May I ask the Leader of the House on what day the Motion on the White Paper will be available?

Mr. Eden: As regards the second point, that will be put down to-day. As regards the other point, the hon. Gentleman is really quite wrong. It is perfectly proper, ordinary and correct for a Supply Day to be used for just this particular purpose for which we propose to use it to-morrow.

Mr. Pickthorn: When the Leader of the House tells us that it is ordinary for a Supply Day to be used for "just this particular purpose," does he recollect that "just this particular purpose" has never before arisen? Is it not an extreme straining of the war-time privileges of the Government to say not only that a Member shall be detained for three, four, or five years, but also, when a considerable section of the House desires to debate that—

Mr. Speaker: The hon. Member is making a speech.

Mr. Pickthorn: rose—

Mr. Speaker: I have informed the hon. Member that he is making a speech.

Mr. A. Bevan: Would you yourself, Mr. Speaker, as the guardian of the Privileges of the House, consider a representation made to you that to use a Supply Day for a matter of this sort, which is concerning the prestige and the Privileges of a Member of the House treating it as though it was a conflict with the Government on a matter of Supply, is an outrage?

Mr. Speaker: That matter is one for the consideration of the Government and not for me.

Mr. Gallacher: Is the Minister aware of the very strong feeling in Scotland that not enough time is given to Scottish questions, and in view of that will he arrange to suspend the Standing Order without any time limit?

Mr. Eden: I have said that I will put down a Motion to suspend the Standing Order, but I did not say without any limit.

Sir Irving Albery: I understood my right hon. Friend the Leader of the House to suggest that as he had announced the Business on Tuesday it was too late to change the matter now. I am sure it is within his memory that those persons whose names were appended to the Motion have been against the procedure which he proposes to employ, and I want to make this point—if I am correct, as I think I am—that by taking this Debate on the Home Office Vote, the Motion on the Paper will not, in fact, be dealt with. It will remain on the Paper and will not have been dealt with.

Mr. Eden: I think that may be so, but the only point I was trying to make, and I was not trying to dodge anything, is that, whether the Debate is on the Motion or on my right hon. Friend's salary, the Motion does call in question the administration of the Home Secretary, which the House is perfectly entitled to do—neither my right hon. Friend nor I am taking exception to that—but it is perfectly proper and ordinary when a situation of that kind arises that the Debate should take place on the Vote of the Minister concerned.

Mr. McGovern: May I ask the Leader of the House to consider this point again, as it causes a great deal of confusion? There are many of us in-favour of abolishing Regulation 18B, but we might have some reserve in connection with certain individuals, if only individuals were to be released and not the general body of the internees. I do not want to deprive the Home Secretary of his salary, but we want to abolish 18B. Could there not be a vote for or against 18B?

Sir W. Davison: Are there not two other distinct points, one the administration of Regulation 18B and the other the continued detention of a Member of the House; and how can the House express an opinion on these two different matters in the form in which the business is now being presented?

Mr. Eden: Both matters are the responsibility of the Home Secretary.

Sir A. Southby: On a point of Order. I apologise to you, Mr. Speaker, but the Leader of the House said that the Motion on the Order Paper called in question the conduct of the Home Secretary. May I point out that that is not so?

Mr. Marton: While it is a legitimate use of a Supply Day to meet the demand of an Opposition for a Debate to put down the salary of the Minister, this is a matter of high Government policy, and I would further point out that the original offence, if it is an offence, was not committed by the present Home Secretary but by his predecessor, and to propose to reduce the present Home Secretary's salary for an offence of his predecessor seems to me to be a misuse of a Supply Day. I would urge the Leader of the House to reconsider the matter. May I

make this further point with reference to the proposal to give an extra day next week to the Debate upon the White Paper, that it means appropriating a Supply Day for Government Business, which seems to me to be a complete misuse of a Supply Day? [HON. MEMBERS: Speech."] I am asking questions, even though there may not be a note of interrogation at the end of each sentence. May I ask on what Motion we shall start the discussion upon the White Paper upon Wednesday? Is it to be a Motion to reduce the Minister's salary, or do we propose to increase his salary for the first two days and to reduce it on the third day? Will the right hon. Gentleman give us some guidance as to the nature of the Motion to be put down on Wednesday, so that we can have a continuous Debate upon the White Paper on Wednesday, Thursday and Friday?

Mr. Eden: I thought I had already dealt with the point which my hon. Friend has raised. I have told him that we shall put the Motion on the Paper to-day, and so there will be ample opportunity for him to study it to-morrow and over the week-end, and to be ready for Wednesday, Thursday and Friday. As regards the point about the Debate to-morrow, I wish to make the Government's position quite plain. We are not seeking to have a discussion on one particular Motion or one particular Vote as opposed to another. There is only one way in which I can meet the wishes of the House. If the House will agree that we shall get our Supply formally then, so far as we are concerned, we are quite prepared to take the Motion; but I have to try to interpret what I understand to be all the points of view in this House, and when I was given to understand that there would not be unanimity in giving us the Supply, without which we cannot get it, then I thought we must have a Debate upon the salary of my right hon. Friend. If the House is willing to let us have the Supply then my right hon. Friend and I are perfectly prepared to take the Debate on the Motion.

NATIONAL EXPENDITURE

Fifth Report from the Select Committee, brought up, and read; to lie upon the Table, and to be printed [No. 86].

BILLS REPORTED

MINISTRY OF HEALTH PROVISIONAL ORDER (NORTH LINDSEY WATER BOARD) BILL

Reported, without Amendment, from the Committee on Unopposed Bills; to be read the Third time To-morrow.

MINISTRY OF HEALTH PROVISIONAL ORDER (WARRINGTON) BILL

Reported, without Amendment, from the Committee on Unopposed Bills; to be read the Third time To-morrow.

NORTH WEST MIDLANDS JOINT ELECTRI CITY AUTHORITY PROVISIONAL ORDER BILL.

Reported, with an Amendment to the Title, from the Committee on Unopposed Bills.

Bill, as amended, to be considered To-morrow.

SELECTION (COMMITTEE ON UNOPPOSED BILLS) (PANEL)

Sir CHARLES MCANDREW reported from the Committee of Selection, That they had discharged the following Member from the Panel of Members appointed to serve on the Committee on Unopposed Bills: Mr. Wedderburn, and had appointed in substitution Lieut.-Colonel Boles.

BILL PRESENTED.

PARLIAMENTARY ELECTORS (WAR-TIME REGISTRATION) BILL

"to make temporary amendments of the Parliamentary Electors (War-Time Registration) Act, 1943, as to the qualifying date for an election and the qualifications required for registration in the civilian residence and business premises registers, and to provide for matters consequential thereon"; presented by Mr. Herbert Morrison, supported by Mr. T. Johnston, the Attorney-General, and Mr. Peake; to be read a Second time Tomorrow, and to be printed. [Bill 29.]

Orders of the Day — FINANCE BILL

Considered in Committee. [Progress, 14th June.]

[Mr. CHARLES WILLIAMS in the Chair]

NEW CLAUSE.—(Relief in respect of billeted children.)

Where the income does not exceed five hundred pounds and the claimant proves that he has an evacuee child or children under the age of sixteen billeted on him, in respect of whom no payment is made for attention and service to such children, he shall be entitled, in respect of every such child, to relief from tax upon twenty-five pounds.—[Mrs. Tate.]

Brought up, and read the First time.

Mrs. Tate: I beg to move, "That the Clause be read a Second time."

Mr. Lewis: On a point of Order. As we are to devote to-day to a discussion of a variety of Clauses may I ask whether you could help the Committee, Mr. Williams, by indicating which Clauses you propose to call, so that we may know what subjects we shall be discussing?

The Deputy-Chairman (Mr. Charles Williams): I am afraid that I did not gather all that the hon. Member said. The Clause I have selected is that in the name of the hon. Lady the Member for Frome (Mrs. Tate). The two proposed new Clauses preceding it on the Paper have not been selected.

Mrs. Tate: It is within the recollection of the Committee that when women were

conscripted for National Service a concession was made in the Income Tax allowances whereby the first £80 of a woman's earnings were exempted from Income Tax. The woman who has children billeted in her home is doing exceedingly important war work, work which frequently occupies her for an unlimited number of hours, is very exhausting and often involves her in expense. Because of the children who are billeted upon her she is unable to go to work outside the home for a salary, and the object of this Clause is simply to ensure that where children under 16 are billeted by the Government in a house the housewife who is looking after them should not be in a less favourable position than a woman who can go out to work. It is, therefore, proposed that for every child under the age of 16 the man of the house should be granted the exemption of £25 of his earnings from Income Tax. The exemption has to be granted to the father in the home because the wife herself is not actually earning any money. It is a very small concession to ask, and I hope the Chancellor will regard this as an opportunity, which I am sure he will welcome, to show his appreciation of the work done by women who have taken in evacuee children. In many instances they have been with them from the beginning of the war, and their parents in some cases no longer even correspond with them.

The Financial Secretary to the Treasury (Mr. Assheton): I think everyone in the Committee will agree that splendid work has been done by those householders who have taken in other people's children and looked after them during the war. All of us should appreciate their efforts. The point which the hon. Lady has made is that in those cases the Government should make a concession under the Income Tax law. I would point out that the billeting allowance is paid for board and lodging and care, and her Clause, in the form in which it is drafted, would not have the effect which she desires. But apart from that point, which I admit is a minor one and one which could be corrected if we so desired, I must make plain to the Committee that my right hon. Friend the Chancellor of the Exchequer does not think this is the correct way in which to approach a problem of this sort. If it is thought that billeting allowances are not adequate, representations should be


made to the Ministry of Health, but I would point out that as recently as 25th May my right hon. Friend the Minister of Health announced that the billeting allowances were to be increased and the increases will come into effect on 1st July. I think that meets the substance of the hon. Lady's point, and I feel that the Committee will agree that in dealing with a matter of this sort it would not be correct to introduce a concession under the revenue law.

Mrs. Tate: With all respect to the Minister, the amount of the billeting allowance has clearly nothing to do with this question. The amount of a billeting allowance is in respect of service, but certainly does not cover the care given by the woman to the children. My Clause is an attempt to give some financial recognition to a woman who takes in children and who is working just as much as one who goes to work in a factory. However, I had very small hopes that the Government would look with a sympathetic eye on my attempt to gain this concession for the married woman, and, therefore, I beg to ask leave to withdraw the Motion.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(Register of cases decided by special commissioners.)

The commissioners of Inland Revenue shall, not later than the thirty-first day of March in each year, prepare and make available for public inspection a register containing a short account of the cases relating to income tax, surtax, national defence contribution and excess profits tax decided by the special commissioners during the twelve months ending on the thirty-first day of December immediately previous, but only in so far as they contain an interpretation of points of law; the short account referred to herein shall not disclose the name of the party or parties to each case, but shall contain sufficient information to enable the question or questions of law involved to be fully understood.—[Commander Galbraith.]

Brought up, and read the First time.

Commander Galbraith: I [beg to move, "That the Clause be read a Second time."
The purpose of this Clause is to provide for the publication of a register containing a short account of cases decided by the Special Commissioners and, in spite of what was said during the Debate yesterday, the Special Commissioners are

a remarkable body of men. They are finely skilled in all matters dealing with taxation law. They spend a large proportion of their time on circuit, hearing and deciding appeals, and they have, accordingly, a very great experience of these matters. Although they are, at the same time, permanent salaried Treasury officials, they show in a scrupulous degree their lack of bias so far as the Inland Revenue is concerned. That was a point which was very forcibly brought out during yesterday's Debate. The decisions of the Special Commissioners are of a very high legal quality, and, indeed, the courts have on numerous occasions gone out of their way to say in what high regard they hold these decisions. No notices of these decisions are published, however, except in the relatively few cases which go to the courts. The inspector of taxes, the taxpayer and those professional men who advise taxpayers are not notified of the nature of the decisions and, in consequence, it seems to me that there is a very great waste of time and effort in settling points which have already been decided by the Special Commissioners and which are constantly being brought up and argued afresh, and even taken to appeal. Had it been known that the Special Commissioners had given a decision on a particular point then no dispute need have arisen.
In these circumstances, I am sure that the Committee will see that the publication of such decisions would be helpful to all concerned. It can be argued that decisions in tax cases depend on the facts of the particular case, and that publication might not be very helpful, but I think we should bear in mind that when a decision has been given on a particular point it shows the trend of the Special Commissioners' opinion and how it might be applied, in the generality of cases while their decisions on principle in connection with particular sections would be of very high value. The Clause is not retrospective. It deals only with the future, but it would be very helpful if, in regard to National Defence Contribution and Excess Profits Tax, the decisions were given from the beginning of the legislation. I am not asking for a similar concession in regard to Income Tax, because the work involved there would be very great indeed, but I would ask my right hon. Friend to consider whether it would be possible to publish the major decisions of the


Commissioners on the question of Income Tax. I do not want this record to be cluttered up with cases which are not of general application, but I do wish it to contain a record of what are essential interpretations of the law as distinct from questions of fact, and that is a matter which, I think, can well be left to the discretion of the Commissioners.

Mr. Benson: If I remember rightly, the Board of Inland Revenue used to publish a series of Income Tax cases of special interest in their annual report, but of late years this practice has been dropped. I forget exactly what cases they chose for publication, but they used to give a small summary in the report. I certainly think that hon. Members would find such a summary interesting and, therefore, I hope that the practice suggested by the hon. and gallant Member in this Clause will be adopted.

Sir Adam Maitland: May I be permitted, in a few words, to support the Clause which has been proposed by my hon. and gallant Friend? I think there may be difficulties, but it is a matter about which practising accountants have made representations for some considerable time, and I would like to submit a point for the consideration of the Chancellor of the Exchequer. In a number of cases the law is interpreted by the Inland Revenue authorities in a certain way, and I think there is a great deal to be said, for the sake of equity, for those interpretations being conveyed to taxpayers generally. In the old days, the Income Tax inspector regarded himself not so much as a collector of taxes as the medium through which the taxpayer would be informed how the law operated and whether any concessions were available. I am sorry to say that this function of the tax inspector—possibly owing to the difference in the rate of tax—has ceased to exist, but I believe the need for it is as great as ever, especially as the taxation now levied is at such a high rate. Therefore, I hope the Chancellor of the Exchequer will see his way although not necessarily in this form, to accept the suggestion to give information, to the taxpayer which, in all reasonableness, he is entitled to have.

The Solicitor-General (Major Sir David Maxwell-Fyfe): Before I deal with the

main point raised by my hon. and gallant Friend the Member for Pollok (Commander Galbraith), I should like to answer the point raised by my hon. Friend the Member for Chesterfield (Mr. Benson). The reported cases were those dealt with in the High Court and not those taken to the Special Commissioners, and, although we shall pay attention to his wishes, I wanted to indicate to him that was a different principle from that raised by my hon. and gallant Friend. I have every sympathy with the desire expressed for the greatest possible publicity, but I am afraid that practical difficulties prevent the acceptance of this suggestion. The Special Commissioners are, if I may underline the opinion expressed by my hon. and gallant Friend, worthy of every tribute paid to them, but, of course, in the Income Tax structure, they are, except for one or two special matters like Surtax and the question of direction, in exactly the same position as all the other bodies of general Commissioners which operate throughout the country. The jurisdiction is co-ordinated and the Special Commissioners have no pre-eminent position in law. Therefore, if the decision of Special Commissioners were quoted, one would be in the difficulty that such decisions would not be binding and, on the other hand, if they were quoted with the authority of a statutory enactment behind them, it would be very difficult for the various bodies of commissioners to distinguish between them and a binding authority.
That is the first point, and I think it is a point of difficulty with regard to practice. A second difference is one which my hon. and gallant Friend fully realised himself, and I would like him to consider it again. He asks for a short report, but if it is a short report, these must be something in the nature—if I may give an example which he in his professional capacity will realise—of notes in the tax cases. Headnotes are absolutely hopeless as a guide to another tribunal. Until one gets into the facts of a case, and know on what point the actual decision was based and what weight was given to the different sets of circumstances, the authority decided by one court does not really help another. In my view—and I suppose few people have had to consider more reports of taxation cases than I have during the past two and a half years—it would be of very little help unless we were to get out complete reports, as is done in


the Tax Cases and in the Law Reports and that would be a great strain, apart from the difficulties which I have already set out on the first point.
I would remind my hon. and gallant Friend that, in addition to the tax cases, there are the cases in the High Court. When these cases have finished their progress, either to the High Court, the Court of Appeal or the House of Lords, or wherever they may end, we do issue leaflets which give considerable and immediate guidance upon the important points of law. It is very rare, in my experience, to find a point of law on which the taxpayer and those advising him really require guidance which does not find its way into the High Court within a very short time. I hope, therefore, that my hon. and gallant Friend will realise that I do sympathise with the intention behind his point, but that I am afraid the Inland Revenue authorities could not deal with this matter, and that the result would not have the practical benefit which he hopes for. Therefore, I ask him, not to press the new Clause.

Commander Galbraith: I wish to thank my hon. and learned Friend for the reply he has just given. Naturally, I am disappointed. I hope he appreciates that this matter is one which the whole profession of accountants, at least, have very much at heart. Notwithstanding what he has said, they feel that a very great benefit would be derived by the taxpayer and by everyone connected with taxation matters if it were possible to publish even a number of the more important decisions given. I hope that, in spite of his reply, further consideration may be given to this matter. I have no hesitation in asking leave to with draw the Motion.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(Provision as to concessions of general application.)

The Commissioners of Inland Revenue shall, not later than the thirty-first day of March in each year, prepare and make available for public inspection a register containing a short account of all concessions of general application in any trade, business or office of employment, or in respect of any particular aspect or aspects of the law granted by them relative to income tax, surtax, national defence contribution and excess profits tax during the twelve months ending on the thirty-first day of December immediately previous.—[Commander Galbraith.]

Brought up, and read the First time.

Commander Galbraith: I beg to move, "That the Clause be read a Second time."
The purpose of this Clause is that the public should be informed of concessions granted by the Inland Revenue authorities. As the Committee is probably aware, these concessions are a departure from the strict legal position; indeed they are a departure from the Statute as approved by Parliament, and the concessions are granted only in cases where it has been found, in practice, that a strict interpretation of the law would be harsh or inequitable. These concessions are granted, in the first instance, in an individual case, and they are not made public, SO that other taxpayers who may find themselves in identical circumstances have no knowledge of them. The concessions, in fact, would only be granted to other tax-payers if they specifically raised the point, although I must say that inspectors of taxes, from time to time, in a kind of off-hand way, tell the taxpayer that, perhaps, there is a concession on the point, arid give him the hint that he might make application. I do not think that is a very satisfactory situation. It is unfair as between one taxpayer and another, and it is also unfair to those professional persons who advise taxpayers and who, indeed, have long asked that publication of these concessions should be made.
It may be helpful to the Committee if I give two examples of the kind of concession I have in mind. Let me take in the first instance the payment of part-time directors in a director-controlled company. There, the law is absolutely clear, and is to the effect that salaries or fees paid to part-time directors are not deduct-able for Excess Profits Tax purposes. But there is a concession and it is this, that where a part-time director happens to be an accountant or a solicitor or an engineer, or someone possessing a special type of skill, then their fees or salaries will be allowed. I know of no one who has ever seen the full terms of that concession. Let me give another example, the extension of the working proprietor standard to those who have joined the Forces. Before that standard is admitted, as my right hon. and learned Friend has said, there is an almost microscopic examination on the part of the Revenue authorities, into exactly what the working proprietor is doing, so as to establish the fact that he is employed full-time.


It follows, then, that when some proprietor is called up, he ceases to be a working proprietor and accordingly the standard of E.P.T. of that business would be reduced. But here again, and I think the Committee will agree rightly, a concession has been granted, so that when one of these working proprietors who is called up to the Services in so far as he is concerned the standard is continued.
Again, this is a case where no one has seen the terms of the concession which is granted, and it is not granted in every case. That means that a working proprietor who is likely to be called up has no idea as to what the Excess Profits tax position of his business may be and that, to my mind, is highly unsatisfactory. I repeat that this concession is not universally granted. There are inspectors of taxes who lay down certain conditions which they require to be satisfied. The taxpayer does not know the terms of the concession, and he is not in a position to rebut these conditions. In fact, he is left entirely in the hands of the inspector of taxes. One could give a number of other examples, for there are many of them connected with Excess Profits Tax and Income Tax, but perhaps these two will be sufficient to satisfy the Committee that the position is unsatisfactory, that indeed injustice is created when these concessions are not published and that publication would appear to be essential. I also consider that publication is desirable from the point of view of this Committee, for concessions are granted only where the provisions of the Statutes are found, in particular cases, to be harsh or inequitable. But these Statutes have been passed by Parliament and surely we should be informed when they have that effect? The point I wish to make is that where concessions are found to be necessary, either the Statutes should be amended, or concessions should be given official recognition and made public so that all concerned can benefit equally.
There is one other point in connection with this matter to which I would like to draw the attention of my right hon. Friend. These concessions are of very great importance, and quite large sums of money may well be involved. In the past, certain large firms of professional people have obtained the services of Inland Revenue officials, have actually paid them compensation for their loss of pension

rights, and taken them into their employment for the sole reason that they have knowledge of concessions. Again, a great many or a certain number at least of Inland Revenue officials have set up for themselves in private practice, as tax consultants, chiefly because they can earn a very good income by the knowledge of the concessions which the authorities give. I suggest that is the kind of thing that can only be stopped by publication of the concessions.

The Chancellor of the Exchequer (Sir John Anderson): I think on this matter I can go, at any rate, some way in the direction desired by my hon. and gallant Friend. It is the fact that, especially under war conditions, concessions are granted which are of general interest and should be of general application. They are granted in virtue of the existence of a somewhat indefinite dispensing power, but the practice is well recognised. When such concessions are granted, the fact is brought to the notice of the Comptroller and Auditor-General so that the matter should not be withheld from the knowledge of this Committee, and if they are not acted upon generally I certainly would agree that they should be.
I think that a clear definition can be drawn here between the substantial concession, which is not merely a matter of favourable interpretation of the law, but which is a conscious departure from the strict letter of the law, and matters of interpretation which would be difficult as a matter of general practice to give out to the public with any semblance of authority. These concessions are authoritative, and as I say, should be of general application. An example of such a concession is the treatment that is given in certain circumstances to members of the Forces. One very clear extra-Statutory concession is the concession under which we refrain from levying Income Tax on the remuneration of the Dominion or Allied or American Forces who are resident in this country for more than six months. The law would require that we should collect income tax on those salaries. We do not. The country concerned may collect Income Tax but we do not collect it. I only mention that extra-statutory concession of a general nature by way of illustration, and there are a good many others, most of them relating to war-time conditions. One that occurs to me at once


is the concession under which travelling expenses are allowed which are incurred by workers who have been evacuated, or whose place of employment has been removed by reason of war conditions. Their expenses would not ordinarily be admitted for Income Tax purposes but certain travelling expenses are, by a special war-time concession, allowed.

Mr. Benson: Is that a non-statutory concession?

Sir J. Anderson: It began as a non-statutory concession. As my hon. Friend has mentioned the point, I ought to say that in many cases these concessions begin as non-statutory ones and when it appears that the need for them is likely to continue, or that they are of a substantial character, it has been the practice to take the first opportunity to put them into statutory form. Anyhow, there are these extra-statutory concessions and I want to tell the Committee that I shall be perfectly ready, if it will be in accordance with the general view of the Committee, to take this matter into consideration between now and Report. If my hon. and gallant Friend will withdraw his proposal, we will see how we can best deal with this matter and will make some further proposal on Report.

Mr. Benson: There is just one interesting point which arises here, that is the relation of the Committee to the Department, or to the Minister who gives non-statutory concessions. From time to time, on rare occasions, we have brought before us on the Public Accounts Committee the fact that some concession has been given, but I gather from what the Chancellor of the Exchequer says, that there are a fair number of these non-statutory concessions.

Sir J. Anderson: In war-time, not in peace-time.

Mr. Benson: It is rather a point of constitutional importance, and I think the Committee should take cognizance of it.

Commander Galbraith: In view of the statement of my right hon. Friend that he has promised to take this into consideration, I beg to ask leave to withdraw the Motion.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(Names of parties in certain cases not to be revealed.)

In all cases stated by the general and special commissioners under the income tax, surtax, national defence contribution and excess profits tax Acts for the opinion of the High Court (but excluding all cases in connection with penalties or fraud) the name of the parties to the case shall not be revealed, and no particulars calculated to lead to the identification of the parties shall be included, and the names of the parties to the case shall he inserted pseudonymously in terms of letters of the alphabet and such cases shall in all official and other reports (including Press reports) he referred to under a serial number.— [Commander Galbraith.]

Brought up, and read the First Time.

Commander Galbraith: I beg to move, "That the Clause be read a Second time."
I hope this Clause is self-explanatory and, that I can be very brief indeed. The situation that exists, and has in fact always existed, as between the taxpayer and the Inland Revenue authority is that matters connected with taxation are treated as private. As evidence of that, hon. Members will recollect that communications which they, together with other taxpayers, receive in connection with their assessments, or matters arising out of them, come to them in an envelope on the front of which the word "Private" is marked in bold letters. An official of the Inland Revenue would no more think of discussing them other than officially, or of disclosing particulars of any taxpayer's return, than would a doctor think of breaking the confidential relationship existing between himself and his patient. I am sure that my right hon. Friend will agree with me when I say that the Revenue has set a very high standard in that connection, a standard which I would suggest he has himself maintained on the Floor of the House, when he has refused to discuss references to individual taxpayers. The taxpayer, under the law has a right of appeal to the High Court against certain decisions given by either the General or the Special Commissioners. These appeals are heard in open court, and full details of the appellant's private affairs or of his business transactions may be made public and may be fully reported in the Press.
This, I suggest to the Committee, is undesirable. Not only is it undesirable, it is unfair. It results in a number of taxpayers refraining from exercising their


rights of appeal under the law. Few people like their private and personal affairs to be discussed in public, and rather than submit to this course forgo their rights. The purpose of this Clause is to maintain the privacy of the taxpayer throughout the whole range of tax procedure, and preserve his anonymity in cases of appeal, except where fraud is concerned, because there every possible measure of publicity should be given as a strong deterrent. The procedure suggested in the Clause is not without precedent because I understand that a court often exercises its discretion in certain matrimonial cases where it orders that they shall be reported in terms of letters of the alphabet, and that the identity of the person concerned shall not be disclosed. That procedure is adopted in the interests of justice, and I suggest that similar procedure would be very beneficial in tax cases. I have discussed this matter of reporting with a number of members of the legal profession, and they tell me that they can see no practical objections to it.

The Solicitor-General: I have listened with great interest to what my hon. ant gallant Friend has said, but I am afraid that on this point I disagree with his approach. In my view, publicity is a fundamental element in the procedure of the administration of English justice, and I could not willingly agree to any divergence from that position. My hon. and gallant Friend referred to certain cases where the suppression of names is allowed. These are most exceptional and occur only where justice could not, otherwise, adequately be done. He referred to certain very distressing cases in the Divorce Court—he had in mind nullity cases, and cases of that kind—and other particular classes of cases, such as blackmail cases where it would be difficult for the prosecutor to go forward were it not for that lack of publicity. With regard to tax cases, I cannot see how the same position occurs. I ought to say to my hon. and gallant Friend that the Revenue authorities have agreed to it, in cases where the affairs of a lunatic come under discussion, and in cases of that distressing character. Apart from that, it has been suggested on only one occasion and there the Revenue authorities opposed it for the reasons I have given.
I differ from my hon. and gallant Friend on two grounds. One is on the general ground I have stated, that cases of this class should be open to the full light of day. My hon. and gallant Friend mentioned the case of fraud. There are also cases where there is a deliberate system of avoidance, presented to the court for determination as to whether that system succeeds. I know cases which have been put forward, quite bluntly, on that basis. I can see no reason why cases of that sort should not receive publicity. However, that is a matter of opinion and my hon. and gallant Friend is entitled to a different opinion if he likes to take it. Between 30 and 40 per cent. of the cases I argue in the High Court turn on the question of whether there is evidence before the Commissioners to justify their decision. If you tried to prevent not only names but particulars calculated to lead to identification of the parties being made public it would make it extremely difficult for the court to decide whether or not there was evidence. Take the class of case where there is a question of whether someone is carrying on a certain trade or not, for instance where a person is carrying on the trade of dealing in land, or is only realising an investment. It is very material that the High Court should know when the land was bought, whether it was development out of Glasgow, Liverpool or London, or wherever it might be, to know the exact position of the land, the circumstances of the purchase and all the details. Quite honestly, and not forensically I cannot see cases being satisfactorily stated to the High Court and yet complying with these grounds, and I imagine that extraordinary controversy would develop between representatives of the taxpayer, the Revenue and the Commissioner's clerk as to what details should or should not be included. Therefore, on the grounds both of principle and practical application, we cannot accept the proposed new Clause.

Commander Galbraith: I know that there are two sides to this question. My only reason for bringing it forward is that I know of numerous cases, where taxpayers have not gone to appeal on the grounds I have stated, because there would be disclosure of their private affairs, or because disclosure might be forced on them which would be highly objectionable to them. However, in view


of what the Solicitor-General has said I beg to ask leave to withdraw the Motion.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(Additional allowance for school tuition or university fees.)

Section twenty-one of the Finance Act, 1920, shall he amended as if the following Sub-section were added:—
(5) If the claimant proves that under the provisions of this Section he is entitled to the allowances provided in respect of any children as aforesaid there shall be allowed in addition to any such allowances the amount of any school tuition or university fees actually paid, by him in respect of the said children, provided that such sum in any event does not exceed two hundred pounds in respect of each child during any one year."—[Mr. Hogg.]

Brought up, and read the First time.

Mr. Quintin Hogg: I beg to move, "That the Clause be read a Second time."
This is a Clause which suggests a quesparents and adopted parents the allow-parents and adopted parents, the allowances in respect of school fees and other educational fees which they expend, up to a maximum. The position at present is that parents have the ordinary Income Tax allowances for their children, but these are calculated on the basis of what it costs to keep them and are not intended to cover the cost of their education. As a matter of principle, I submit that the Treasury ought to allow something towards the cost of their education. In his broadcast of 22nd March last year the Prime Minister clearly stated—as we should all agree—that, in the circumstances of modern life, only a highly educated community can survive as a great Power. The standard of education which is required involves two things. It involves a high and generally diffused standard of general education, and a high and generally diffused standard of technical and special education.
What is the situation for parents who desire to educate their children up to that standard and who thereby confer on a community at large, in addition to their children, a very large degree of benefit? They must pay the entire sum out of their taxed income, in addition to any degree to which their taxes are increased by provision for the children of others. I think it would be generally admitted, that parents who spend money on the

education of their children are not confined to the very rich. They include people in all walks of society, from the humble crofter in the Highlands who starves himself to pay for a university education for his son, to working-class people in London, professional people, civil servants, and the like, all of whom often undergo great hardship in order to provide their children with something which is not merely of benefit to themselves, but is of lasting benefit to the community.
It is also true that this benefit would not be otherwise obtainable by the community. Even were it the case, that, in order to give these benefits to their own children, parents were withdrawing their children from the ordinary statutory system of education, there would be a negative benefit to the State because the cost of educating the children would be borne by the parents. But, in fact, that is not mainly the case, so far as the parents are concerned, with whom I am primarily dealing. The expenses they incur are largely for secondary, university and technical education. Let me give one or two examples. An institute in this city with which I am concerned—the Polytechnic Institute—largely provides adult technical education for young people. That education is very largely outside the ambit of the public system, and yet it is necessary for people of all classes to get the education which that Institute can give. Parents have to provide it out of their awn taxed income. I know of a case of two young men of a working-class family, both highly intelligent. Their parents were able to give only one of them a secondary education; the other had to go through life with only a primary education, although it was apparent to all who knew him that he could have benefited by the secondary education which his parents were unable to afford. I think of a case of someone in a rather different walk of life, a civil servant, who told me the other day that he was deliberately limiting his family, because he desired his two sons to have an education comparable to their intelligence, and to the state of life to which he wanted to bring them up. Is that to the public advantage? He said that life would be intolerable for people in his way of living, if the State did not do something by a tax concession in order to provide for the education of children.
I am aware that certain arguments will be put perhaps from the other side of the Committee, and perhaps from this side, in opposition to what I am saying. It will be said that the right remedy is not the one which I propose, that the right remedy is to provide universal education for everybody, so good that nobody should go without. That may well be true. Let hon. Members try to put such a system into effect and I will be with them. But we all know that the day when such an educational system is introduced into this country is a long way ahead. No one who has gone through the Debates on the Education Bill, which is admitted on both sides to be a great educational advance, will doubt that the actual administration of that Bill provides for years of administrative progress, perhaps five, ten or fifteen years ahead. When every step envisaged by that Bill has been brought into law, a great field of education outside it will not yet have been touched.
I do not suppose there is a responsible Member of the party opposite who would dare to say that, even if his party was given complete power to-morrow, within 15 years there would not be parents in all walks of life who would be providing education for their children, over and above what the community provides. Whether that is desirable or not, I do not inquire, but it is the obvious and incontrovertible fact. If hon. Members opposite desire to oppose this concession, they should make it plain that, for 15 years, they are condemning parents to pay for what is largely of benefit to the community. It will be said that such a concession would perpetuate present class differences. Nothing is further from the case. What it would do is, perhaps, to take the child out of the ambit of political controversy. I do not consider that to be an undesirable objective. If hon. Members opposite have reforms to suggest, let them suggest them but, until those reforms are not merely suggested but have actually been put into effect, let them not deprive a single child, from whatever class he comes, of the education to which he is entitled, which his parents can afford to pay for and which is of lasting benefit to the community.
We are faced with a situation in which those who have led us to victory have very largely enjoyed education pro-

vided by their parents. It is impossible to think that anyone with any sense of responsibility would state that if the needs of the country in doctors, in professional men, in civil servants of the higher grades are to be met for the next 15 or 20 years, they will not depend on the services which parents render in educating children at their own expense. The community needs this education. No responsible party believes that it can provide it at once in sufficient quantity to satisfy the needs of the community. In the days when those things are possible, no doubt it will no longer be necessary to ask for concessions of this kind, but until those days have come, let everyone realise that, by opposing concessions of this kind, he is ultimately the enemy of education and the enemy of the child. Let no one say that those who represent the great bulk of the professional classes have no right to live in the state of life to which they are accustomed. Let no one suggest that those a little above the bottom income level, skilled workers, professional men, shopkeepers, farmers, who desire to pay for their children's education, are not entitled to do so and to receive some concession from the State. I press this concession on my right hon. Friend. If he cannot give it now let him see whether he cannot give it by this time next year, because I believe that, if he does, this country, which is still a backward country in general and technical education, compared with some other countries, will, at last, do what his own country, Scotland, has done for many years and put the education of the child among the first necessities of his upbringing.

Mr. Benson: We have heard a very eloquent address which has succeeded in throwing a wonderful smoke screen about the hon. Member's proposal. He has suggested that it is a great educational reform, but it is nothing more than a financial concession to certain people who can afford to pay for their children's education. It will not increase the facilities for education. The Education Bill, as he says, is not likely to produce the results we want for many years to come, but that is not for lack of finance. It is not as if the universities and technical schools were half empty because parents could not afford to send their children. They are full, and merely to give additional financial aid to parents would not enable


them to provide one additional place. This proposal would give financial help to people who can afford to send their children to universities, and I see no particular reason why that should be done. Everyone admits that it is really desirable that we should have a high standard of university education, but there is no particular reason why the State should facilitate the education of children whose parents can educate them. One of the advantages of an income above a certain level is that you can afford to give your children a better education than is now provided free. There is no reason why people who have this advantage of income, should receive any concession in this matter which is denied to people whose income is below the level which enables them to take advantage of higher education. If the hon. Member likes to take as his standard "Unto him that bath shall be given," well and good, but the Labour Party is more concerned to see that, unto him that hath not, shall be given. I oppose the Clause on the ground that it will not, in any way, increase the amount of higher education that is given, but will merely have the effect of giving additional advantages to certain people who are already fortunate.

Dr. Russell Thomas: I am rather inclined to agree with the hon. Member for Oxford (Mr. Hogg). There is a side to the question which should be considered and it was not considered by the hon. Member who has just spoken. Many people struggle to give their children education and they are frequently not people who are well off but, on the other hand, are filled with the spirit of enterprise, initiative and self-sacrifice. They want their children to do better than they have done and if relief can be given—I do not say that it can—those people should be encouraged. I trust that the Chancellor of the Exchequer will favourably consider the proposition, as far as he can do so.

Mr. Gallacher: I think the young progressive Tory has a case, but I marvel at the passion with which he presents such a wrong and rotten argument. He tells us that the Education Bill will not come into practical operation for five, 10 or 15 years. The Education Bill is of the greatest importance in relation to this question and the Chancellor of the Exchequer must take note of it. It is going to give every child in the country a secon-

dary education free. Children are to be retained at school until 16, as soon as we can get the age fixed at 16. Many of my own friends have lived on next to nothing in order to get their children educated and, when the age is raised, it will mean a heavy burden on fathers and mothers arid the country generally. There is some talk of a family allowance and that sort of thing, and I do not object to that. But the Education Bill says that every child shall get secondary education, and that that comes into operation in 1945, and, as soon as possible, the age will be raised to 16 and the avenues to the higher forms of education are to be opened wider and wider. It is not a case of the technical colleges and universities being half empty, because the people who are capable of sending their children do not send them. Many of the best people are not being sent there, because their parents cannot possibly afford to send them.

Mr. Benson: This is not a concession to the poor but to the rich.

Mr. Gallacher: Any relief of this kind is going to be a relief to working-class families. It will be an encouragement 10 those parents who are trying to send their children to the higher institutions of education. The Chancellor himself has been brought up with a thorough understanding of what it has meant to families in Scotland. No one knows better from personal knowledge and experience the efforts that have been made, the tightening of the belt that has gone on throughout Scotland in order that the children should get a better education. The principal thing that I would direct attention to is to bring his concessions for children into line with the new principles of education set forth by his own Government.

Major Procter: I did not mean to take part in this Debate until I heard the representative of the Labour Party speak. He surely must have forgotten that the new class of taxpayer is the working man. How can he say anything against the working man getting a concession for his child? I must support the request to the Chancellor of the Exchequer to do something for these men and women who find it difficult to pay for the higher education which is the right of every child, irrespective of the kind of home in which he lives. Some of the hardest hit sections of society are the


small shopkeepers and professional classes. They are between the upper and lower millstones. They have no trade union to speak on their behalf, they are not organised, and they have not the capital resources of the rich. The well-to-do are being gradually eliminated. With taxation up to 19s. 6d. in the it will not be long before we have no very rich people in the country at all. We do not need to do injustice to the rich people who paradoxically are the new poor, for a man's wealth consists not in what he possesses but in the fewness of his wants. The upper classes on which we relied in the past to pay for our social reforms are now living on their capital and ceasing to exist.

Mr. Gallacher: How many go to the public assistance committees?

Major Procter: That is irrelevant to the point. Many of them will soon not have the reserves behind them that the Communist Party has. It is the working-class and the middle sections of society to which the Chancellor will have to look for his revenue in the future.

Mr. Gallacher: Will not the hon. and gallant Member understand that there can be no middle section if there are no rich left?

Major Procter: Those are mere sounding words that mean nothing. The hon. Gentleman knows exactly what I mean. The point I am trying to make is that all our reforms and our education schemes in the future must be paid for by an inroad on the workers' wages by means of taxation. Hon. Gentlemen opposite want the standard of life and wages of the working people to be increased and they should realise that the very fact of increasing their wages will make them more and more the future Income Tax payers. Therefore, I am right as a Conservative and as one who looks after the true interests of the working-people to support this new Clause. I have been a member of the working-class myself, and I know the difficulty of getting an education. I am not ashamed of the fact that I started as an apprentice engineer, and used my engineering skill, such as it was, to work my way through three universities until at last I became a Master of Arts and Doctor of Laws, but it was hard difficult work. My father was un-

able to pay for my education. Now I want other fathers not to be handicapped as my father was with a large family and unable to pay for the education of his children.
I ask the Chancellor to look at this matter from the viewpoint of the working man's child and the viewpoint of the working man himself who wants to see that his child gets the best that the country can give him in the way of education. In what better way could he do that than by making the concession in this proposed Clause, and by saying to the new Income Tax payer, "The State is going to benefit from something that you will do. You are not going to put your child to work and take his wages. You are going to work harder and make more Revenue for me, and, therefore, I will make this concession so that you can educate your child." The Chancellor is a sympathetic man and, as a Scotsman, he values education. Therefore, I hope that he will, at least, give us the hope that he will consider whether some concession can be made to those people who have worked hard and who wish to see their children rise to higher places than they themselves reached.

Mr. Pethick-Lawrence: In spite of what has been said on both sides of the Committee the Labour Party, as such, has not any particular policy in this matter.

Major Procter: An hon. Member behind the right hon. Gentleman said that he was speaking on behalf of the Labour Party.

Mr. Pethick-Lawrence: Whatever has been said by the hon. Member who moved the new Clause, or whatever has been said behind me, the Labour Party has not expressed its views specifically on the new Clause, or on the principle that lies behind it. I want to make that clear. As for the merits of this proposal, the Labour Party have always pressed for high rates of allowance for children and have been successful with Governments in securing that reliefs, which started to apply only to children under 14, should be raised above that age where the parent was keeping a child at great expense to himself at some educational establishment. The Labour Party broadly favour concessions made on incomes for the purpose of enabling parents to keep their


children in education. This particular new Clause is, of course, a matter for the Chancellor to decide. I was consulted on this point before I saw this Clause on the Paper, and I was bound to tell the person who consulted me that it was a matter which the Chancellor would have to consider with all its re-percussions. While it is right that a large allowance should be made to a man for keeping his child in education, we are brought up against the fact that there are other meritorious services which a man may perform for the community. He may keep an aged parent according to the circumstances of life in which he was brought up, and he may put up a case for spending £200 for keeping his aged mother. Although that case may not be as strong as that which applies in this new Clause, I can see that a considerable argument might be developed along those lines.
In general, the Chancellor does not make allowances to people because of the meritorious character of their expenditure. He makes them according to the size of their income. He makes certain allowances, which apply to the whole population for dependants and particularly for children, so that relief can be granted in respect of the great expenditure which the citizen incurs in feeding, clothing and sheltering his children and educating them. The Chancellor may well consider, either in this Bill or on some future occasion, whether the allowance that is made for a child is adequate. It is a great deal larger already than the proposed allowance that is likely to come under the Beveridge Scheme or whatever version of the Beveridge Scheme the Government put forward, but I recognise that there is an obligation on the State to a man who spends money to keep his child away from industry until the child is equipped for the best that it can reach. I would, therefore, look favourably on any proposal which the Chancellor may see fit to adopt at some future time for increasing the allowance for children in general and for children continuing their education at the expense of their parents. It is, however, a matter for the Chancellor to consider at the present time in view of the facts and of the repercussions that it must have in other fields of admirable expenditure which a private individual may incur.

Captain Duncan: Although I am not a member of the Tory Reform Committee, I should like to support my hon. Friend's new Clause on three general grounds, in addition to the argument that he has used. First, in future the taxpayers of this country will, broadly speaking, correspond with the population of the country. The Income Tax payers of to-morrow are not the Income Tax payers of pre-war days, and, therefore, the burden which Used to fall on the rich and the middle classes will be far more widely spread in future than in the past. Second, the rate of tax is far higher now than before the war. When Income Tax was 4s. 6d. and 5s. in the £ the people who sent their children to school were able to afford it. Now, with Income Tax at 10s. plus Super-tax, which is likely to continue, according to the Chancellor for many years after the war, it becomes a much greater burden on parents than it has ever been before. The hon. Member for Chesterfield (Mr. Benson) said this concession would not increase the number of university places, but it may well increase in the future the number of children to fill the existing places. Third, all the statistical pundits say that our birthrate is going down. It should, therefore, be the duty of this country to take greater care than ever before that the children who are born should be given the utmost possible assistance to increase their efficiency in the interests of the nation. It is a generally accepted fact that in many families to-day there is deliberate restriction of the number of children on economic grounds. We want, in the interests of the birth-rate, to avoid that restriction as much as we can, and one way is to see that if parents do have children they will be able to educate them in the best interests of the community.

Mr. Edmund Harvey: Like hon. Members who have already spoken, I hope that the Chancellor will be able to accept the principle of the Clause, even though he may not be able to accept the Clause itself. I hope also that the right hon. Gentleman will show his support of the principle by making it clear that fuller provision will be allowed for parents who make real sacifices, in order to let their children go on with their education, through school and to a university. I appear to be the only Mem-


ber in the Chamber at the moment representing a university. I should like to say how mistaken is the idea, sometimes held even by Members of this Committee, that students of universities come from comfortable or well-to-do homes. The majority of students, in the universities of Britain taken as a whole, have fought their way up from the elementary schools by means of scholarships, and they could not have done even that had it not been for the help of their parents, who are, very often, making great financial sacrifices in order to allow them to go on with their studies. It is a very heavy burden upon a student, to know, all the while, that his parents are making a big sacrifice in order to render it possible for him to continue.

Mr. Mathers: And often his brothers and sisters are being sacrificed, too.

Mr. Harvey: It means that for one member of the family to have this advantage, an opportunity may have to be withheld from other members of the family who deserve it almost equally. It would be a real help to many students, as well as to the happiness of their parents, if a substantial concession of this nature could be afforded to parents who make sacrifices in order to allow their children to have the fullest possible education, in the interests not just of the child but of the community as a whole. We ought to get the best out of all the children in this country in order that they may play their part as citizens for the good of the whole nation.

Sir J. Anderson: The proposer of this Clause supported his proposal by a very persuasive speech, the sort of speech that one would expect from him, and also a speech which came very appropriately, from one bearing a name which is honourably associated in all our minds, with an educational institution of outstanding merit. The speeches which have followed, have indicated the importance which this matter presents to hon. Members. Nevertheless, I must suggest to the Committee that the approach made by this proposal is not, in fact, the right approach. The mover said that this proposal involved a matter of principle; it certainly does, as a proposed amendment of Income Tax law. It raises a very important matter of principle, as my right hon. Friend the Member for

East Edinburgh (Mr. Pethick-Lawrence) pointed out.
The principle which lies behind our system of Income Tax allowances is to give relief at a flat rate to every taxpayer in respect of his dependents, and not to attempt to measure the relief by reference to the actual expense incurred. That principle was examined very fully and thoroughly by the Royal Commission on Income Tax—and its Report is still a classic in regard to Income Tax matters—in relation to this very question of educational expenditure. The suggestion was made to the Commission that dependants allowances might be given as a percentage of income or varying with incomes, so that people with a higher rate of income who wished to maintain their dependants on a higher standard should have a larger allowance, but the Commission rejected such arguments altogether. They reported that, in their view, the fairer way is to regard the allowance for each dependant as an extension of the effective exemption limit, as a minimum which does not increase as the income increases; and I am bound to say, while having much sympathy with the observations that have been made in regard to educational expenditure in general, that, so far as Income Tax law is concerned, that principle still holds good.
We shall, indeed, get into difficulty if we begin to depart from it. For example, the high taxation which is inevitably associated with war conditions falls with special weights on parents who have commitments in regard to their children's education, but there are many other classes and sections who can claim with equal force that those very conditions have imposed upon them burdens which weigh very heavily and from which they cannot escape. Case after case could be brought forward to show that, as a result of war conditions, taxpayers have to incur expenditure which reduces their available income for ordinary spending to very narrow limits. If we cannot make special allowances for taxpayers who can show that the present conditions have imposed special burdens upon them from which they cannot escape, is it not very difficult indeed to make a case for giving special allowances in respect of expenditure which is discretionary, as this additional expenditure on education undoubtedly is?
There is a further practical difficulty, a very real difficulty, and we must when we consider amendments of Income Tax law, consider the administrative aspects of the problem. I notice that in the proposed new Clause there is a maximum limit of £200. That is a high limit, but I suppose it was put in to meet the case of children who are being educated at boarding school. It is one thing to argue that a special allowance should be given in the structure of Income Tax law in respect of educational expenditure, but if the educational expenditure covers board and lodging, the case becomes certainly very much weaker, and the problem of trying to separate or break up the fees of boarding schools into what is properly to be attributed to tuition and what represents board and lodging would be very difficult. The position of tax inspectors would practically be impossible.
I am bound to say to the Committee that, whatever the case may be for making provision which will bring higher or special educational facilities more effectively within the reach of people in all classes of the community, this is not the appropriate way to do it, and that I could not agree to it without involving myself and my successors in difficulties with which they should not be confronted.

Mr. Hogg: It is clear from what the Chancellor has said that he does not accept the principle of this proposal. Despite its kindly nature, his speech, I am bound to confess, disappointed me considerably. I am driven to choose between the alternatives of acquiescing in his negative, or driving the matter to a Division. It has, however, always been my conviction that it is very wrong to vote against the Government, at any rate unless one warns them beforehand that one is going to do so, in order that they may whip up sufficient support to meet one. In this case, no such warning was given.
I was very much encouraged by the reception with which this proposal met, and I am not without hope that a succeeding Chancellor may be educated up to accepting a similar proposal. I, indeed, hope that it may even be the same Chancellor, because we hope to have him with us for a very long time. It is not true that this proposal is designed to benefit simply those who can afford this

expenditure already; it will benefit a great number of people who could not afford it, apart from the concession. It cannot be in the interests of wise canons of taxation that a parent should he allowed to spend the same amount of money on lollipops for his children a he does to give them a decent education. It is not true or fair to compare the human commitment on a child which one educates, in the interests of the country as well as of itself, with the other financial burdens which a man has to undergo. The principle to which the Chancellor of the Exchequer referred is already infringed in connection with life assurance policies. If I ask leave now to withdraw the proposed new Clause, perhaps I shall have the honour on a subsequent occasion of moving it with more success.

Mr. Benson: I wish to thank the Chancellor of the Exchequer for standing firm on this matter. I am still entirely unrepentant. This method of meeting educational expenses is not the correct one, which is not to give Income Tax concessions. Income Tax concessions of this kind are definitely regressive. They mean that the higher the income the greater is the concession. I am as anxious as any other Member that education should be made accessible to the widest number of people. If we want to make education cheap, we should give direct grants. That is the proper way to do it. The hon. Member for West Fife (Mr. Gallacher) referred to crofters starving themselves to educate their children.

Mr. Gallacher: Are we to follow on with this discussion?

Mr. Benson: The hon. Member referred to crofters starving themselves to educate their children.

Mr. Gallacher: I did not.

Mr. Benson: All honour to people who make these dire sacrifices to educate their children, but they are the people who would receive the least advantage under the proposed new Clause. [HON. MEMBERS: "No."] Oh, yes. If we want to enable the children of poor people to be educated, let either a definite grant be made to each child that is educated, or else cut the cost of education. Do not make the concession on a


basis of income, which is regressive and gives a larger concession as the income rises.

Mr. Gallacher: Of course the hon. Member for Chesterfield (Mr Benson) is one of the most orthodox economists, if he can be called an economist, I have ever been called upon—

Sir William Wayland: Is not the Question before the Committee whether the Clause should be accepted or not?

The Temporary Chairman (Colonel Sir A. Lambert Ward): It is "That the Clause be read a Second time."

Mr. Gallacher: The hon. Member for Chesterfield got up to speak on a subject, and I followed him to speak on that subject. My first reference is to the hon. Member who preceded me. He got up in order with further arguments to stiffen the very poor case he put in the earlier part of the Debate. The Chancellor, in the argument he put forward, did not, I am certain, satisfy those who supported the proposed new Clause. Therefore, I am of the opinion that we should not be too ready to withdraw the Clause. We should endeavour to get the Chancellor to give it further consideration. It was the hon. Member for Oxford City (Mr. Hogg) who talked about the crofter starving owing to the fact that he sent his children to a university. I referred to it in passing to point out that crofters starve whether they send their children to a university or not; it is one of the tragedies of the Highlands of Scotland.
The Chancellor must bring his taxation into line with the new education proposals of the Government. It is not enough to say that the children will get their education free up to 16 and that the doors to the higher stages of education are to be widened. Greater allowances must be made to the parents of these children. I know only too well what it means to a working-class family when children have to be kept at school until 16 years of age. It is not enough to say that they are getting education free. Take any family who keep their children at school until the age of 16. The children are getting education free at the secondary school—those who pass the exarnination—but does anyone tell me that it is not a heavy burden on the parents to keep them in the second-

ary school, that because the child goes to the secondary school and teaching, books, and this, that or the other are provided, that that is all the parent has to do?
The parent has to buy all kinds of books for the advancement of the study of the child, apart from those given at school. He has every kind of expense in order to keep that child going at the secondary school. Let anyone walk round the working-class districts and see the children of 14, 15 or 16 years of age who are going to secondary schools, and then go to their homes and see what their parents are actually expending. I insist that the Chancellor brings his concessions for children into line with the new decisions upon education. There must be a Considerable extension of the concessions. I think we should hear something further from the Financial Secretary before this proposed new Clause is withdrawn. May be he is more amenable than the Chancellor.

Question, "That the Clause be read a Second time," put, and negatived.

NEW CLAUSE.—(Deduction for traveling expenses of blind person.)

Notwithstanding anything in any Rule or Statute to the contrary it shall be lawful to deduct as expenses from any profits or gains by way of earned income any cost incurred by a blind person in travelling to or from his work over and above that which would normally be incurred by a person not incapacitated by blindness.—[Mr. Hogg.]

Brought up, and read the First time.

Mr. Hogg: I beg to move, "That the Clause be read a Second time."
This concession for which I ask is one which I hope will meet with the general sympathy of the Committee. The object of this new Clause is to put a blind person in at least as favourable a position as if he were not blind. Under the present law, ordinarily speaking, the expenses of travelling cannot be deducted from earned income for Income Tax purposes. But it is quite obvious that a blind person has more travelling expenses than other people. He may have to hire a guide. I was moved to put down this Clause by a case in my own constituency. I was approached by the local organisation for the blind about the case of a blind war-worker, a gentleman totally blind, who ordinarily would not be in employment at all. In addition to his bus fares he had to pay 12s. 6d. a week to


a guide to lead him from his house to the bus stop, and not unnaturally he desired to deduct 12s. 6d. a week from his earned income for the purpose of Income Tax. Otherwise, lie was obviously having to pay out, by reason of the fact that he was blind, a sum far greater than a worker who is not blind.
Originally, I thought this was a matter which could be dealt with by one of the concessions about which we have been hearing, the extra-statutory concessions, or under war legislation. I asked a Question of the Chancellor with these objects in mind. This is the answer I got:
As I explained in reply to your question in the House on 28th March the general position is that no Income Tax deduction is allowable to an employee in respect of the exper.ses of travelling to and from his work, Under Section 23 of the Finance Act, 1941, or Section 26 of the Finance Act, 5942, however, an employee whose place of work or residence has changed through circumstances connected with the war can claim Income Tax deduction, up to £10 in the year, in respect of any additional expenses of travelling to and from work which he has to bear by reason of the change. These Sections only give relief to employees whose travelling expenses to their places of work were increased because war conditions, had necessitated a change in their place of work or place of residence. They do not extend to cases where there is no question of a change of the place of am employee's work or residence, and therefore do not afford any relief in the case of Mr. Wright, who had no employment before November, 1943.
Then the Chancellor goes on to say that he has sympathy with this case, and that suggestions have been made from time to time that a blind person should be given special relief from Income Tax because of his disability, and he says:
It has never been possible to accept these suggestions.
I feel that the Committee will support me when I ask for this concession.
Blind people all over the civilised world, and even in countries not civilised, have been the subject of special consideration and special compassion from time immemorial. It is only fair, in my submission, that when a blind person has the courage and determination to go to work he should be put, as regards expenses, in exactly the same position as a person who is not blind. To do that it is necessary to make him a special concession. The concession for which I am asking is that any blind person should be entitled to deduct as expenses from any profits or

gains by way of earned income, any cost incurred by him in travelling to and from his work over and above that which would normally be incurred by a person not incapacitated by blindness. I am not asking that he should be privileged in any way, that he should be entitled to deduct his bus fare, but that if, like my constituent, he has to employ a guide, or perhaps keep a dog to take him to his place of work, he should be entitled to deduct the cost as an expense, which commonsense tells us it is.

Mr. Tinker: I would like to support this new Clause. I think everybody will be in sympathy with it, though the Chancellor will have a difficulty in determining how the concession can be granted without running the risk of its being infringed. If that could be made easy I do not think there would be any doubt the Chancellor would agree to it. There cannot be many blind people affected by this, but they are certainly put to greater expense than the ordinary person. They are entitled to some practical sympathy from those who enjoy good health and eyesight. We all want to do what we can for a blind person and if he is doing some extra work for the war we ought to meet him as well as we can. I have seen people led by dogs and assisted across the road by other people. One has deep sympathy with such cases. We have an opportunity, without incurring a big financial liability, to show our feeling for them.

Sir Patrick Hannon: I would like to support this new Clause. I happen to be the honorary treasurer of an eye hospital where we deal with many thousands of people suffering from blindness. It would be a concession of no consequence to the national revenue if such people could be afforded the facilities suggested by my hon. Friend. Take, for example, the case of Sir Beachcroft Towse, our blind V.C., a man who has done magnificent service for the community since the last war. It seems absurd that in travelling from place to place in this country, doing public service of incalculable value, he should have to pay his own expenses without any con-cession on the part of the Exchequer. There are many other blind persons doing magnificent work. We have in our munitions factories facilities to enable blind persons to be trained, even in the most


delicate work connected with components of war weapons. These people sometimes have to travel considerable distances to their employment. It is only reasonable in these cases that the concession suggested should be made. I believe that the sympCommittee will be with the blind, and it will be a practical manifestation of it if we can say to the country that the House of Commons is prepared to recognise the work which the blind have been doing, at great personal sacrifice, for the war effort.

Sir W. Wayland: I would like to support the proposed new Clause. As chairman of a blind club I recognise the difficulties. A great number of the blind have to be led to the club. I doubt whether the great majority or any of them come within the scope of Income Tax, and there must be very few who would come under the proposed new Clause. I suppose 99 per cent. of the blind people of this country do not come within the Income Tax laws, but there must be some who come within those laws during the war, and I think that the Chancellor might make this concession. It would not mean much to the Exchequer; yet it would go very far towards ameliorating the financial condition of some of these people who are giving their services during the war, whereas they would not be working in time of peace.

Mr. Mack: I have always maintained that this country, which comes, presumably, in the category of civilised countries, does relatively little for the blind. Most blind people are among the lower-paid workers when they are in gainful occupation, and, when they have no other means of subsistence, they come in the lowest categories from an economic point of view. Unfortunately, we have not the figures, but the number of blind workers cannot be high. I should imagine that those relatively few blind people who are working under war conditions, and who have to face, among other things, the blackout, a still greater difficulty in the case of blind people, will require assistance from either an animal or a person. If the hon. Member for Oxford (Mr. Hogg) has erred at all he has erred, if I may say so, on the side of under-statement, because our imagination and our sym-

pathies are one thing, but our practical support is what the blind require. In no circumstances would this concession be likely to be abused, and it would impose on the Exchequer no great degree of sacrifice as far as money is concerned. Therefore, I think the new Clause ought to commend itself to Members on all sides of the Committee.

Sir Frank Sanderson: I rise to support this new Clause. I think there is a general feeling in all parts of the Committee that it is a Clause which my right hon. Friend might accept. I appreciate, however, the point, made by my hon. Friend the Member for Leigh (Mr. Tinker), that there may be some difficulty in arriving at a formula which would make it possible to determine what expenditure has in fact been incurred. Perhaps, if my right hon. Friend is not able to accept this new Clause, he might consider, between now and the Report stage, framing a Clause which would achieve the object which we all have so close at heart.

Mr. Assheton: The hon. Member for Oxford (Mr. Hogg), who put his case so persuasively, said that he felt sure there would be a general, measure of sympathy in the Committee. It is certainly true that there is a general measure of sympathy for blind people. I am sorry that my right hon. Friend the Chancellor is not here to deal with this question, because I know that he has taken a particular interest in the case of Mr. Wright, about whom the hon. Member had written to him. He gave his personal attention to that case. But, however much sympathy we may have with these cases, there are one or two considerations which I would like to put before the Committee. It is really not possible to use the Income Tax legislation as a means of ironing out all the sad inequalities which there are in human nature, in human suffering, and in human circumstances. There was, as the Committee is aware, a very comprehensive Report by a Royal Commission on Income Tax, over which the late Lord Colwyn presided, and they gave great attention to examining, particularly, allowances and expenses of all kinds. I would like to read what the Royal Commission said with regard to this matter, because they were an important Commission, and they gave close attention to evidence on these problems. They said:


We have been asked to recommend allowances for expenses arising out of illness or disability such as the travelling expenses of attendants of disabled person; or to give compassionate rebate to persons who are compelled to maintain and pay personal attendants; or special relief to disabled persons in view of their decreased earning capacity. These claims, while differing in degree, all arise out of the personal or domestic circumstances of the taxpayer and although we are conscious that in particular cases the operation of the general rule may result in individual hardship, we feel that we cannot advise any general relaxation of the principles on which the tax is levied.
In 1939 the hon. Member for Kidderminster (Sir J. Wardlaw-Milne) moved a new Clause to the Finance Bill, to grant certain increased personal allowances to blind people. The then Chancellor of the Exchequer, now Lord Simon, rejected that Clause. He said:
I am sorry to say that sympathetic as we may feel I think we ought not to accept this proposal, for it is one of an entirely novel character to which there is really no end. It is essential for the purposes of the Income Tax as it has been devised and administered by various Governments in this country that the reliefs that are given should not be those given on personal grounds of disability or suffering but are simply reliefs to different categories."—[OFFICIAL REPORT, 3rd July, 1939; Vol. 349, C. 1011.]
Where would such a concession lead us? The case made out by my hon. Friend the Member for Oxford is a strong case; but is the case any less strong for a lame or infirm person who finds difficulty in travelling?

Mr. Hogg: I do not think that my right hon. Friend's question to me is quite pertinent. The new Clause relates to travelling expenses for a person who is actually in work, that is to say, expenses which he actually incurs in work. It is not a claim for relief for somebody who happens to be suffering from a disability.

Mr. Assheton: I suggest that, if a lame or infirm person has great difficulty in getting to work, and he has to take taxi-cabs instead of ordinary public conveyances, it is difficult to differentiate between him and a blind person. There are all sorts of cases which come very close to that. We are constantly being asked for allowances for people who have to bear the expense of artificial limbs, or aids to hearing for the deaf, and so on, and even for those who have to use spectacles. Once you have departed from this rule which the Royal Commission laid down, and which all Chancellors of

the Exchequer have adhered to ever since, I do not think you will be able to avoid going down the slippery slope of concession after concession. Because there are hard cases it does not necessarily mean that we have to alter the law. I ask the Committee to bear in mind that Report of the Royal Commission, and to come to the conclusion, as the Chancellor of the Exchequer has done, that, although we are very loath to do so, we ought to resist the Clause.

Sir P. Hannon: Surely the wholly blind are placed in a different category from other people; but my right hon. Friend, in the speech he has made, has brought the blind into the same category as all other infirm people. It has been the policy of successive Governments, and the sentiment of the House on many occasions, that the blind should be placed in a category of their own.

Mr. Assheton: I should like to meet that case, which has been made by my hon. Friend the Member for Moseley (Sir P. Hannon), who has very great sympathies in this matter. It may be that, as the hon. Member for Newcastle-under-Lyme (Mr. Mack) said, we do very little for the blind—I am expressing no opinion about that—but I suggest that it is not the proper way to deal with this matter through the Income Tax laws.

Mr. Mack: The views of the Royal Commission are not necessarily sacrosanct, and the right hon. Gentleman has himself admitted that the hon. Member for Oxford (Mr. Hogg) has made not only a persuasive, but a good, case. Whatever may be said about other people who suffer physical incapacity, the blind are in a very different category, because they have lost one of the best senses, and theirs is an incomparably greater disability than any other loss from which people normally suffer. The fact that others may—only "may"—take advantage of the concessions, or that legislation may subsequently be passed to take into account other people physically affected, is not in itself a reason for depriving the blind of a privilege to which they are justly entitled.

Mr. Hogg: I am going to ask my right hon. Friend if he cannot see his way to think again, in view of the very strongly-expressed opinion of the Committee. I appreciate, and I respect, his desire to protect the Revenue from pure sentimen-


tality in matters of taxation. That is a task which all of us, at some time or another, have to fulfil. But I feel that the object of discussions in this Committee is to make clear that some concessions are possible without infringing that general consideration, and I ask him if he cannot think again. He said, to begin with, that all the inequalities of this mortal life cannot be ironed out by taxation. How heartily I agree with him. But if we can find an inequality of a particular kind which can be ironed out, I am sure we would all want to do it. I am not asking for some privilege to compensate the blind man for his blindness. That would be just the thing which the Royal Commission reported against, no doubt rightly. What I am saying is that when a blind worker goes to a factory, and incurs additional expense, attributable to his blindness, he ought to be put in the same position for purposes of taxation as if he were not blind. I am not asking for a privilege but for equality. The inequality I am complaining of is not an inequality of life, but an inequality which is imposed upon him by the system of taxation. I am asking that that inequality should be reduced. I think that, on reflection, my right hon. Friend may come to the conclusion that his reference to the Royal Commission was not altogether in point. I am sure, from the passage which he read, that the Royal Commission had in. mind relief from the effect of disability. I am asking for something which ordinary common sense would tell us is an expense to be allowed as an expense in respect of earned income.
I do not think that this opens the door to a great flood of further concessions. We have the definite tradition, in all civilised countries, that the blind are entitled to a special position because they are disabled. Even if it were not so, I should not be very much afraid that one or two concessions of this kind would lead us very far. I feel that my right hon. Friend will, on reflection, be able to do something for us because this is a case, quite apart from one's own human feelings in the matter, which it is quite impossible to explain to the outside world as being just. I am not afraid that there is any real danger of abuses. To begin with, before anyone can be entitled to this relief, they must be suffering from a perfectly ascertainable disability. Nobody

can effectively pretend to be blind when he is not—or very few people anyway—so that it limits the field either way.

Mr. Tinker: It is only politicians that can pretend to be blind.

The Deputy-Chairman: This discussion has gone on for a very long time, and I must remind the Committee that they have a great deal of work to do, and that, if we are to go into all these sidelines, it will take a considerable time.

Mr. Hogg: I was only proposing to show that it would not lead to abuses. There are a great number of travelling expenses and the Income Tax authorities have found it perfectly possible, within limits, to prevent abuses. I do not see why they should not be able, equally, to do it in the case of an ascertained blind man.

Mr. McEntee: In spite of the fact that the discussion has gone on for quite a long time, I think it is so important that it might legitimately go on a little longer. I think the hon. Member for Oxford (Mr. Hogg) is right, and the Financial Secretary to the Treasury not right in the reply he gave to the hon. Member. It has been said by the hon. Member for Oxford that concessions are made now for travelling expenses to all kinds of people, including most of us here. They have also been made in connection with the war, to certain workmen, whose expenses, because of the war, are higher than they would otherwise be. If that is so, why cannot the concession be extended just a little further? The fact that there are sympathetic reasons for its extension does not appear to me to be any reason against its extension. Sympathy ought rather to be in favour of extension than against it. The findings of the Royal Commission have been mentioned. I wish the Government were always as anxious to accept the findings of a Royal Commission, as they appear to be in this case, but my experience leads me to think that whenever the findings are going to cost money, the Chancellor is never very favourable to them. He is always anxious to quote precedents, where Royal Commissions have reported unfavourably, and to show that their decisions were right.
The number of people affected by this proposal would be very small. In the first place, the blind person, for whom the concession is asked, must be working. In the second place, he must be earning


sufficient to enable him to be an Income Tax payer, and, in the third place, he must be able to satisfy the Income Tax people that he is, as a matter of fact, as a consequence of his blindness, caused expense over and above the amount which a normal person would spend travelling to the same job at the same place. If the Chancellor makes a concession, as he is doing, to a normal being, not afflicted by any infirmity at all, because the actual cost of his travelling from his home to his job has increased because of the war, surely he can extend it and make the concession that is asked for in this suggested addition to the Clause on behalf of blind persons? The Chancellor is always very sympathetic in these things, but his sympathy does not always extend to giving them what they ask. I think this is a special case, and I think the right hon. Gentleman might think again, as he has been asked to do, between now and a later stage of the Bill, and see if he cannot meet this point.

Mr. Tinker: May I make a suggestion to the Financial Secretary? Some time ago we had a difficulty with the then Chancellor, Mr. Neville Chamberlain, over payments for school fees. So strongly did the feeling run that the right hon. Gentleman was asked to leave the matter over and to meet a deputation to consider ways of getting over the difficulty. The right hon. Gentleman agreed and said he would like to meet a certain number of people and have a talk with them about it. We did not get a settlement that year, but next year he did meet the point. I suggest that the Financial Secretary should not reach a final conclusion to-day, but that he should meet people and point out the difficulties, and see if there is not some way out. It is obvious that the feeling of the Committee is in favour of something being done. I do not want to challenge the Government, but I am of opinion that, if the question is carried to a vote, it will be decided against them. I ask the Minister not to be too hard, but to consider the appeals made by other hon. Members, and I suggest that we ought to consider every point of view before we reach a final decision.

Mr. Assheton: I know the Committee will acquit me of any lack of sympathy and will realise that I am basing my case on what I consider to be a matter of

principle, and certainly not on the question of pounds, shillings and pence, the Chancellor would not have taken this decision, or come to this view at all. I think the proposal which the hon. Member for Leigh (Mr. Tinker) has made is One which I can reasonably accept, in that I can assure the Committee that the Chancellor would, of course, be ready to have discussions with hon. Members later. But I must ask the Committee to reject this Clause. There is no question of allowing the Clause to pass, and I am bound to say, so that there should be no misunderstanding between my hon. Friends and myself, that I think the deputation will find, when they come to meet the Chancellor on this matter and discuss this subject with him, that there are very powerful reasons indeed, which make it difficult to accept a Clause of this nature. Having said so much, I hope I may now ask the Committee to reject the Clause.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(Housekeeping allowance.)

Where a taxpayer through any circumstances is obliged to employ the services of a housekeeper the taxpayer shall be entitled to a tax allowance of fifty pounds per year.—[Dr. Russell Thomas.]

Brought up, and read the First time.

Dr. Russell Thomas: I beg to move, "That the Clause be read a Second time."
I do so in the unavoidable absence of my hon. Friend the Member for South Bradford (Sir H. Holdsworth), but first may I point out that there is another Clause which is practically on the same subject?

The Deputy-Chairman: I quite realise that there are two other Clauses of a similar nature. I do not expect that the Chair will call either of the others, but I express the hope that, if either of those Clauses is a little wider or narrower than this one we shall discuss it here, and not go any further into them.

Dr. Thomas: Normally, a widow or widower, with or without children, is allowed £50 per year, and we are asking that this shall apply, not only to a widow or widower, but to a person who is bound, say by infirmity, such as blindness and so on, to have someone as


housekeeper. We think that the same relief should be given in such a case. We have heard a great deal to-day about the Royal Commission, and this matter also has been discussed by the Commission which has been referred to to-day. That Royal Commission decided that relief of this kind was analogous to an allowance in respect of medical expenses. I will read the two or three lines from the Report of the Royal Commission or at any rate give the gist of them. The Commission said that such an allowance is analogous to an allowance for medical expenses. They took the view that the burdens arising in special cases through the infirmity of the taxpayer are things for which no system of taxation can provide, and they went on to say that
it is not possible in any scheme to adjust taxation so closely as to take into account the purely personal circumstances of each taxpayer.
There may be other persons besides children who require someone to look after them, and the point is not in my opinion completely met by saying that it is analogous to medical expenses. I will put it in another way. We give an allowance to widows with children because the children are unable to look after themselves and because they are weak and not fully developed, as it were, and they require mental and physical attention until they reach a certain age. I think a blind or infirm person in a house is in a similar position, in that he or she is weak and requires the help of someone else. Therefore, I do not think that the Royal Commission's finding, when they say that this is analogous to an allowance of medical expenses, is quite correct, and I think the actual principle behind the whole thing, as regards infirm people when they have to have someone to look after them is very much the same as with children. I trust that we shall not hear that argument from the Financial Secretary. It was my intention merely to move formally the Clause on behalf of my hon. Friend, but I thought I would make this point.

Dr. Peters: I would like to support what my hon. Friend has said, but I would also like to call attention to the new Clause, later on the Paper, which I propose should be incorporated in the Bill. There I seek to bring into

the Bill an allowance for a housekeeper in cases where persons suffer from blindness or chronic ill-health, such as rheumatoid arthritis and so on, people actually crippled, often, and unable to see after their households or children, and also other cases where either the taxpayer or his wife is a cripple. I am not concerned to argue the point with regard to Royal Commissions. We all know for what they stand. I always take the view that this House or Committee, upon the facts brought before it, is the proper body to decide what is to be done. We can always read the evidence in the Reports of Royal Commissions, but when all is said and done, it is not good enough for the Chancellor to wrap himself round with these Reports and come here and say, "I cannot do this, that or the other because of the Report."
There is a principle here which has already been in Finance Acts for several years, where an allowance has been made for a housekeeper in cases which my hon. Friend has mentioned. There is an allowance up to £50 in the case of children or of an adopted child. There is also an extension of that to a female relative, and, if there is no female relative willing or able to take the charge or care of the children, then any other person can be employed, and the allowance is granted. What difference is there between making a specific allowance in these cases and in cases where a person has to come into the home and take charge or care of a person who is blind or is a chronic invalid or a cripple? I am asking, therefore, not for sympathy, as sympathy without help is no sympathy at all, but for some consideration to be given to these cases and not merely on the ground of expenses. I remember, when quite a lad, that my mother was an invalid for 20 years and was five years in bed. There was the expense of doctors and what not, and it was necessary to have somebody there to see after us, and it is only reasonable that we should incorporate in this Finance Bill a provision of this kind which will give relief in such cases.

Mr. Bowles: I support the new Clause. I have two cases from my own constituency of miners who are working long hours, whose wives in both cases are bedridden, and they have small children. These men, whose wages are nothing like as high as is sometimes be-


lieved, even by hon. Members, are put to the expense of employing somebody else to do the work in the house which their wives would do for them if they were well. I have communicated with the Chancellor on two or three such cases and he always takes the attitude referred to by the hon. Members who moved and supported this Clause. I agree with the hon. Member for Huntingdon (Dr. Peters) that it is not good enough to rely upon the findings of a Royal Commission some 10, 15 or 20 years ago. If that is the logic to be used in cases of this kind, obviously it prevents any progress being made at all.
I submit to the Chancellor that throughout the history of Income Tax law allowances and improvements have been made from year to year. I do not pretend to know how long it took before a Committee of this House decided that certain business men should be given allowances in respect of expenses which they had to incur in the ordinary course of their business, but the proposals must have been turned down year after year until ultimately the good sense of the House prevailed with the Treasury. The Committee should do something to deal with the cases where, owing to the unfortunate circumstances existing in these times, men are unable to benefit from the allowances that their wives obtain in the ordinary way and are forced to employ someone else to prepare their meals and look after their children and generally keep the house going because the wife is bedridden. The Clause is so worded that it puts the onus of proof on the taxpayer seeking the relief, and anyone Who has seen cases of this kind and has given the matter serious thought is bound to come to the conclusion that there is a case which the Chancellor should consider and concede.

Rear-Admiral Beamish: I should like to support what has been said on this Clause. I do not know when the housekeeping allowance was originally brought in. It must be of considerable antiquity, but in 1924 it was extended so that not only childless widows but also childless widowers were able to draw it. The late Chancellor of the Exchequer said that he was by no means sure that it was a wise decision. The decision was made in 1924 by, I presume, the late Lord Snowden. My attention has been drawn to this matter on several occasions.

I have one particular case in mind of a teacher who has done 40 or 50 years' great service and is now elderly and infirm with a small pension. She informed roe that she is unable to do the housekeeping work for herself and therefore has to employ a housekeeper, and she feels that it is a great hardship and an anomaly that childless widows or widowers who live near her can get the housekeeping allowance quite easily and yet she is unable to do so. That is all I have to say on what seems to me to be an Amendment which is designed to remove an injustice.

Mr. R. C. Morrison: May I add one or two sentences from a slightly different angle? I do not know what the Chancellor is going to say in reply to the discussion, but I hope that he is not going to turn down the whole thing, because there is a case that is worth looking into. The Statute lays it down definitely that, before an allowance can be given for a housekeeper, the housekeeper must be resident in the house. Perhaps the right hon. Gentleman would look at what that means nowadays under the more recent war-time legislation, and when a great multitude of working people have come under Income Tax for the first time in their Eves. A workman's wife dies and he has to get in a housekeeper to look after the children. In the ordinary working-class house there simply is no place where a housekeeper can sleep. It consists of a bedroom for a man and his wife and accommodation for the children. There is no separate bedroom for any-body else who happens to come along, and, therefore, it is impossible for the man to provide sleeping accommodation for a woman he has brought in as house-keeper.
If the Chancellor were to give way on this point, he is afraid, as he told me in correspondence, that it might open the door to further concessions. Surely it would be possible to give the Income Tax officers power in a case like this, where they know that it is genuine, to grant special exemption. I hope that he will look into that point.

Sir Robert Tasker: I would make an appeal to the Chancellor not only on behalf of the cases which have been cited, but on behalf of so many


others which come under review by Members of this Committee. The type of case I have in mind is that of the ex-Service man who has been injured and suffers from increasing incapacity. Such a man must have assistance of some kind. One could multiply these cases hundreds of times, but such is not my intention, but rather to point out to the Chancellor that it must strike hon. Members as particularly mean to deny the ex-Service man assistance in a form equivalent to a few shillings a week, when the country can forgive certain other people some £250,000,000 of unpaid Income Tax. If Parliament can be so generous, I respectfully suggest that it can afford to be a little more generous to these people who suffer from such grave war disability.

Sir J. Anderson: The speech of my hon. Friend the Member for Holborn (Sir R. Tasker) serves to illustrate very clearly the difficulty of the line of argument that has been taken by some speakers in regard to this proposed Clause. He stressed the hardships of a case which must appeal to us all—the case of the disabled ex-Service man who requires the services of an attendant because of his condition. I feel bound to say, without any desire to appear unsympathetic, that a Finance Bill is not properly to be regarded as a vehicle for making all sorts of concessions and granting all sorts of subsidies and allowances to various classes of people whose cases are hard and excite our sympathy.
Take this very case stated by my hon. Friend. The case of the ex-Service man who is disabled and requires an allowance for an attendant is met, and very properly met, in the arrangements made by the Ministry of Pensions. In such a case, where there is a condition of total disablement and the services of an attendant are required, an attendant's allowance is provided. That line of approach, which I suggest is the appropriate one, the direct line, should be adopted for dealing with such cases, but you get nothing but confusion if you try to make some sort of parallel or supplementary provision by way of amendment of the Income Tax law. If the provision made by the Pension Warrant for such cases is not adequate, then it ought to be considered on its merits and, if this Committee thinks

fit, it can be improved; but it ought to be one thing or the other and I, personally, feel, from every point of view, that the direct approach, wherever possible, is the appropriate one.
We have here a proposal which seeks to reopen matters all of which were discussed at great length in connection with last year's Finance Bill. I would say, first, a word about the wording of the Clause. It runs:
Where a taxpayer, under any circumstances, is obliged to employ the services of a housekeeper.
That word "obliged" is a very difficult word. I do not know what it means. Is it intended to refer only to such cases as those of a taxpayer whose incapacity, whose state of health, is such that he cannot get along at all without the services of a housekeeper, or would it be extended to include the case of a taxpayer, an unmarried taxpayer, who finds it more agreeable to live in a house and to have a housekeeper to look after him than to live in lodgings? I do not know. All these considerations are opened up by the use of the word "obliged." I venture to think, if the Clause were adopted, that the word "obliged" would have to become a dead letter. The test would be: Is the housekeeper, in fact, employed? The taxpayer no doubt would say, believing it or thinking it right so to do having regard to the wording of the law, "I employ this housekeeper because my circumstances oblige me to do so," and that would be the end of it.
I am bound to ask myself what is the history of this question of the housekeeper's allowance and what is the basis of the allowance? Let me remind hon. Members that, as the law stands, this housekeeper's allowance is given to a widower or widow who has a resident housekeeper, without any further test or check. It is also given to any other taxpayer who has a female person resident with him to look after a young child or young children for whom he gets the children's allowance, either the ordinary children's allowance or the adopted children's allowance. Here the point made by the hon. Member for Nuneaton (Mr. Bowles) comes in—the case of the man whose wife is a cripple, is disabled, and who has no children. He made the case sound very impressive, but, in fact, as the law stands, and as the result of a concession made, I think, last year, the


married man whose wife is disabled throughout the Income Tax year and who has a child or children gets a housekeeper's allowance in addition to the allowance for the wife, so that case is met. [An HON. MEMBER: "What about the resident housekeeper?"] I am coming later to resident housekeepers because that point was raised by my hon. Friend the Member for North Tottenham (Mr. R. C. Morrison), and I will deal with that in a moment. At the moment I am dealing with the general case.
The housekeeper's allowance, so far as I have been able to ascertain, was originally intended for the widower who was obliged to hire someone to look after his young children. That was the ground on which this allowance, which is a comparatively recent innovation, was first granted. Following the recommendation of the Royal Commisson on Income Tax in 1920, an allowance was granted to a widower or a widow who had a female person living with him or her to look after young children, and it was granted, at the same time, to a single taxpayer who had a female relative living with him to look after a young brother or sister. In 1924 the requirement of young children was dropped in the case of the widower or widow, so that since that date a childless widower or widow has been able to get an allowance for a resident housekeeper. That improvement became, naturally enough, the starting point for further requests, further demands, for an extension of the allowance to cases where there were no children. In 1942, as my right hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence) will remember, my predecessor undertook to review the whole question of the housekeeper's allowance with the result that in last year's Budget, in 1943, he announced proposals for widening the scope of the allowance so as to give relief in cases which had not previously been eligible, where the care of young children was involved.
It would, perhaps, not be out of place if I quoted from the speech my predecessor made last year, because nothing new has happened since then. The situation is exactly the same; the case for a further extension is neither stronger nor weaker than it was this time last year. What he said was this:
The allowance for a widower or widow was originally given only where there were

young children to be cared for, but in 1924 this condition was dropped, with the result that the widower or the widow obtained the allowance merely on the ground of the maintenance of a resident housekeeper. Although I do not propose to disturb it, I am not sure that this extension of 1924 was a wise one. It was a great source of complaint on behalf of other taxpayers that they had not the same allowance as the childless widower or widow if they employed a housekeeper. My proposal for widening the sphere for the housekeeper's allowance is founded particularly on the presence in the home of young children and the absence of a wife who has primarily the normal maternal duty of looking after the children. I propose, accordingly, to extend the scope of the housekeeper's allowance so as to grant it to any taxpayer who is entitled to the Income-Tax relief in respect of a child or adopted child or employs or maintains a resident housekeepr. There must be"—
and this is the point—
as the proviso that the taxpayer is either entitled to a single personal allowance or, if entitled to the married personal allowance, can show that the wife is permanently incapacitated and that he must, therefore, have a resident housekeeper." —[OFFICIAL REPORT, 12th April, 1944; Vol. 388, c. 956–7.]
The change that was made by my predecessor last year had the effect of bringing in a single person with an adopted child or a divorced or a separated spouse having the custody of the child. Therefore, we are now in the position that the care of children is fully provided for—and that is quite apart from the fact that the housekeeper's allowance can be claimed by a childless widower or widow.
The further claims that may be made are of great variety: the case of the single taxpayer without dependants—I really do not think that is a strong case; the case of the aged or infirm taxpayer—that seems a somewhat stronger case; the case of the taxpayer with an aged or infirm dependant. But those are only particular instances of taxpayers who, for one reason or another—it may be one of an infinite variety of reasons—have special obligations and special expenses to meet out of their incomes. I find it extremely difficult to see where, as a matter of principle, if we start extending again and go further than my predecessor was able to go on a very careful and full review of the position only a year ago, we are going to stop. Finance Bills would then indeed become the vehicle, as I indicated at the beginning, for concessions to be made at the expense of the taxpayer for meeting all sorts of hard cases. I am very sorry to have to take


that view but I think it is the only view that I, as the Minister responsible for Income Tax administration, can possibly take.
There remains the question of the nonresident housekeeper, with which I promised to deal. That question also was raised in last year's Debate. The case was made, just as it has been made to-day, that the circumstances of a household may make it impossible in practice, or extremely difficult, to provide accommodation for a housekeeper in circumstances in which the employment of a resident housekeeper would be absolutely justified. I am not going to deny for a moment that there is some force in that argument, but I venture to say—and my conclusion is the same as that of my predecessor who went into this matter—that you put the tax inspector in a very difficult position if he has to look at the circumstances of each individual case and make up his mind whether the taxpayer is pitching a tale, whether the facts are really as represented. Residence is a very good practical test where there are children; the case for a housekeeper is the case for having someone who can give motherly care all through the 24 hours. If this concession were made, it would really have to extend to every case where daily help is employed in running a house. That is what it would come to in practice. I hope the Committee will not press me to go further at this time, when there are no new arguments at all, than my predecessor, who made a very careful examination, felt justified in going a year ago. The situation has not changed in the last 12 months in a way which justifies us in doing something to-day which would not have been justified then.

Mr. McEntee: Does the right hon. Gentleman not consider that the conditions have changed very materially owing to the fact that a great number of houses have been destroyed, and that overcrowding is infinitely greater now than it was even last year? It is growing because no new houses have been built and a great number of houses have been destroyed. Families are compelled to live in a couple of rooms and a father who has lost his wife, and is left with three or four children, cannot bring in a resident housekeeper unless, of course, they occupy the

same room, but that would not be the intention of the Income Tax law. You may have the case of two people living next door to each other. One man may have a whole house and one child and will be entitled, if he has a resident housekeeper, to the concession now given, while next door you may have a man living in two rooms, who is unable to get any other accommodation, having three or four or more children. There are many such cases. Surely some concession ought to be made now, because of those changed circumstances, to the man with the large family living in congested conditions?

Sir J. Anderson: I want to give the fullest consideration to every argument that may be brought forward, but I cannot really agree that since this time last year there has been any such change in actual conditions as would in itself justify a change.

Sir R. Tasker: According to my information and experience over some 25 years in connection with an institution, a disabled ex-Service man's pension is governed by the percentage of disability at the time of his examination. We have found that whilst some men respond to treatment, others get much worse and become totally disabled, and the latter are then told that they must prove that this extra disability is due to war service. I think the Chancellor has not made—

The Temporary Chairman (Sir Cyril Entwistle): I do not think that question arises on this new Clause.

Question, "That the Clause be read a Second time," put, and negatived.

NEW CLAUSE.—(Deduction for wasting assets of extractive industry.)

(1) In charging the profits or gains of persons engaged in the extractive industries there shall be allowed in addition to the allowances under Rules 6 and 7 of the Rules to Cases 1 and 2 of Schedule D an allowance known as the percentage depletion allowance to be determined as hereinafter provided.

The term "extractive industries" means for this purpose a trade or business engaged in the winning of any ores or minerals, or the getting of oil from oil-wells, and includes industries engaged in the winning of limestone, sandstone, igneous rock, chalk, asbestos and mica.

(2) The percentage shall be calculated on the realised value, during each accounting period of the person carrying on the business of the extracted products at the site where they are extracted.

(3) The percentage to be applied to the value as determined under sub-paragraph (2)


shall be such rate as the Commissioners having judisdiction in the matter consider just and reasonable, having regard to the unexpired capital outlay at the beginning of each accounting period, the expected life of the natural deposits, and the expected rate of extraction of those deposits.

(4) The capital outlay to which the Commissioners shall have regard shall be all expenditure incurred by the person carrying on the business in prospecting, the acquisition of property and mining rights, preparatory development expenditure, the sinking of shafts, the cost of mine buildings and administrative expenditure up to the time when production commences.

(5) The Commissioners shall determine in the case of each trade or business to which these provisions apply the value of the capital outlay unexpired at thirty-first March, nineteen hundred and forty-four, having regard to the extent to which the natural deposits have been exhausted at that date and the percentage depletion allowance shall be applied to that expenditure and to all subsequent expenditure of the same nature except revenue expenditure.

(6) If the person carrying on the trade or business is dissatisfied with the decision of the Commissioners as to the rate of percentage depletion allowance or as to the amount of the capital to which it is to be applied there shall be the right of appeal to the Board of Referees.

(7) If the assets are sold by the party carrying on the trade or business and the price realised by him for those assets is in excess of the capital outlay determined under sub-paragraph (5) as reduced by the aggregate amount of the percentage depletion allowances to the date of the sale, the excess amount so realised shall be chargeable to Income Tax as a profit arising in the accounting period in which the sale took place. The amount realised by the sale of such assets shall be determined by the Commissioners and if the person carrying the trade or business is dissatisfied with their decision there shall be the right of appeal to the Board of Referees.

Provided that—

(a) No deduction for percentage depletion allowance or repayment on account of any such deduction shall be allowed for any year if the deduction when added to the deductions on that account for any previous years will make the aggregate amount of the deductions exceed the aggregate capital outlay as determined for the purpose of this section.
(b) The deduction of percentage depletion allowance in any year shall not exceed fifty per cent. of the profits assessable to Income Tax under case one of Schedule D after deduction from such profits of:—

(i) deductions for wear and tear and for obsolescence under Rules 6 and 7 of the Rules to Cases x and 2 of Schedule D;
(ii) payments other than payments of interest which are not permissible deductions from the profits only by reason of the fact that they are paid under deduction of Income Tax.


Any amount by which the percentage depletion allowance is reduced by reason of this limitation may be carried forward and added to the percentage depletion allowances of future accounting periods until it is exhausted. —[Commander Agnew.]

Brought up, and read the First time.

Commander Agnew: I beg to move, "That the Clause be read a Second time."
This new Clause is designed to remove a noticeable and, in many cases, overwhelming burden of taxation which rests upon the mining industry and those other branches of the general extractive industries which have as their object the winning of wasting assets. If I address my remarks chiefly to the case of metalliferous mining and do not deal so much with coal, it is because in the case of coal mining the deposits are usually extensive, compact, and easily accessible, and therefore the overhead charges are not high, whereas in the case of metalliferous mining the ore-bearing lodes are almost always narrow, very often slanting, and sometimes intermittent, and you have to tunnel your way through large quantities of granite or other hard rock before you get established, and therefore you have very high overhead charges. Furthermore, in order to maintain contact with the ore you have from time to time to undertake very vast development schemes which are entirely out of the ordinary and therefore very costly.
In the present situation, in the absence of any form of relief to this branch of the industry, the board of management of a metalliferous mining concern are forced, by circumstances, to neglect the development they ought to make for the future, and therefore tend rather to distribute the profits more easily acquired on the deposits most easily recovered because they are so near to hand. That action is quite contrary to the tenets of good mining, and I submit that it is also contrary to the national interest, because it is wrong that a mine should have to shut down solely on the ground that it cannot finance the development which it ought to undertake during such a period as its production is temporarily suspended.
There is one more aspect I want to stress. When the investors of a mining enterprise receive a dividend or distribution of profits over a period, they are really drawing partial interest but they are


also having returned to them some part of the capital that was originally invested. Sooner or later the time comes—and it comes sooner in the case of base metal mining—when the mine is worked out. Then it is that there will be no more dividends, and investors' income from that source will cease. Neither is there any more capital to be returned to them, except their share, a meagre result in a particular shareholder's case, of the sale of the mining equipment for scrap value. The company has no reserves to fall back upon in order to prospect elsewhere in the district and it closes, and we get the dreadful social evil of mass unemployment. It would not be contended that the profits of a mining enterprise should not be taxed on the same principle as other enterprises are taxed, but it should be taken into account that part of the profits which under the present law fall within the Income Tax are returns of capital, and our tax law ought to reflect that position now.
Our law lags far behind that of other countries in the matter. In Australia, Canada, South Africa, as well as in the United States of America, there are depreciation allowances in some form or another, which are of a substantial degree, to deal with the special position of mining wasting assets. Only recently, in the midst of their preoccupation with the war effort, the Commonwealth of Australia introduced special concessions to base metal mining producers in their country, and I submit that it is not too soon for us here to consider, in planning our post-war world, what allowances we are to give to our mining enterprises in order to develop the wealth that lies below the ground.
In the Clause before the Committee the principle has been adopted of a percentage depletion allowance, and that has to be worked out according to the formula which is provided for in the Clause. The percentage, when it has been worked out, will be applied to the value of the products of the particular mine or quarry which have been extracted during the year concerned. It is proposed that the rate of percentage will be worked out by the Commissioners of Inland Revenue, and it will naturally vary according to the particular class of industry, whether it is a quarry, an oil well, a mine or a sand pit. The Commissioners, in arrive-

ing at the appropriate percentage to be applied, are charged with the duty of having regard to a number of factors, one of which is the unexpired portion of the capital outlay. Obviously, if a mine has been run for a very long time a large amount of wealth drawn out of it the same conditions would not fall to be applied to it as in the case of a mine with all its wealth before it unextracted. That will have to be worked out by the Commissioners of Inland Revenue, so that some relief is granted, but not more relief than is justifiable. There are several safeguards in the Clause which are intricate in detail, and although I have inserted them on the advice of those well qualified and closely connected with the mining industry I do not propose to explain them in detail now.
I have put down this Clause because it is felt that the ordinary flat rate of a company Income Tax system should no longer in our country, any more than in the other countries I have cited, be applicable in the case of the mining industry. I go so far as to say that unless some change is made in our laws it will not be possible to set on their feet again, in post-war conditions, some of the mines and quarries which have been a great standby to us during this war, and which in our post-war economy we urgently need in order to make it possible to derive full wealth from our country.
This proposal would, of course, benefit the shareholders who put their money into a particular enterprise, but it would also benefit the people who lived where the mines are, and in particular those who worked in them. I am happy to be able to say that so far as my own constituency is concerned the trade representatives of the workers in the mines there have looked very favourably on the proposal to deal specially with these mining enterprises, and I am authorised to say that I have their support, as well as that of the management side for bringing it forward to-day. I trust the Chancellor will give the proposal his favourable consideration and if, as is sometimes the case, the Treasury draftsmen are not able to accept the exact phraseology used by other draftsmen outside, he will bend his energy, as I am sure it is his will, towards bringing forward at a later stage some other proposal which will bring the measure of taxation relief which the mining industry and its associated industries demand.

Sir J. Anderson: May I remind the Committee that in my Budget speech I made known my intention to introduce at a later stage certain proposals, which I particularised to some extent, for easing the burden of our existing Income Tax system upon industry? I said in regard to these matters that there were still many details to be worked out, that my advisers were busily engaged on the task, and that my intention would be to propose legislation in good time so that any new arrangements that might be accepted by Parliament could come into operation speedily on the termination of hostilities. In regard to this question of wasting assets in extractive industries I said:
I propose also to introduce a depreciation allowance in the extractive industries, that is, in mines, oilwells, quarries and the like, where capital expenditure is incurred on various types of assets which are limited in life by the life of the mineral or oil deposits."—[OFFICIAL REPORT, 25th April, 1944; Vol. 399, c. 676.]
I am still in the position in which I found myself when I made my Budget speech. Work is being done on these problems, and I hope to be in a position to make proposals before the next ordinary Finance Bill becomes due. I can certainly assure my hon. and gallant Friend and the Committee that, in framing such proposals, I will pay due consideration to what I find set out in this rather formidable Clause and to what my hon. and gallant Friend has said in com-mending this matter to the consideration of the Committee. I hope, in the circumstances, the Clause will not be pressed.

Commander Agnew: I and the other supporters of the Clause will be glad to know that, although the Chancellor of the Exchequer cannot accept it as it stands, or undertake to introduce a substitute for it this year, he will, before next year's Finance Bill, introduce and see passed through legislation which will carry out the purpose that we have in mind.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(Amendment as to ante for repairs.)

(1) The following Rule shall be substituted for Rule 7 of No. V in Schedule A:—

(a) Where tax is charged upon annual value estimated otherwise than by relation

to profits, the following provisions shall have effect:—

In the case of an assessment upon any house, building or land, the amount of the assessment shall for the purpose of collection, be reduced

(i) where the owner is occupier or chargeable as landlord, or where a tenant is occupier and the landlord has undertaken to bear the cost of repairs, by a sum equal to the amount of the authorised reduction hereinafter mentioned; and

(ii) where a tenant is occupier and has undertaken to bear the cost of repairs, by such a sum, not exceeding the amount of the authorised reduction, as may be necessary to reduce the amount of the assessment to the amount of rent payable by him:

Provided that the amount by which an assessment is reduced shall not, in the case of an assessment exceeding the amount of forty pounds, be less than it would have been if the amount of the assessment had been forty pounds.

(b) Where the amount of the assessment is less than the rent by a sum greater than the authorised reduction which would be allowable if the assessment were in the amount of the rent, after deducting from such rent any outgoing which shall by law be deducted in making the assessment, this rule shall not apply.

(c) The authorised reduction for purposes of this rule shall be—


(i) Where the amount of the assessment does not exceed forty pounds
A sum equal to one-fourth part of the amount of the assessment.


(ii) Where the amount of the assessment exceeds forty pounds but does not exceed fifty pounds
Ten pounds.


(iii) Where the amount of the assessment exceeds fifty pounds but does not exceed one hundred pounds
A sum equal to one-fifth part of the amount of the assessment.


(iv) Where the amount of the assessment exceeds one hundred pounds
Twenty pound s together with a sum equal to one-sixth part of the amount by which the assessment exceeds one hundred pounds.

(2) In paragraph (1) of Rule 8 of the said No. V in Schedule A for the references to one-eighth part arid to one-sixth part of the values there shall be substituted references to the authorised reduction.

(3) This section shall, unless Parliament otherwise determines, cease to have effect on the fifth day of April, nineteen hundred and forty-nine.

(4) Section twenty-eight of the Finance Act, 1923, and section twenty-seven of the Finance Act, 1942, are hereby repealed.—[Mr. Turton.]

Brought up, and read the First time.

Mr. Turton: I beg to move, "That the Clause be read a Second time."
I must apologise for the length of the Clause but the object is to avoid legislation by reference, and it includes a great deal of what is already in Rule 7 of Schedule A. The present position, which we regard as unsatisfactory, is this. Where you have land and an agricultural dwelling house or agricultural buildings, the repairs allowance is one-eighth of the annual value. Where, however, you have houses which are not in the same assessment as land, the allowance varies from one-fourth to one-sixth, dependent on the annual value, in the way set out in the Clause. I submit that it is wrong that an agricultural house should have a lower repairs allowance than a house that is not let in connection with land.
Let me give three examples from my own experience as a landowner. I can think of a cottage which is let at £8 a year, which is what we regard as a statutory rent for a labourer's cottage, and a similar cottage let with three acres of land, where the rent is not £8, but £10. The repairs allowance for the cottage let by itself, to an agricultural worker, is £2 a year; the repairs allowance for the cottage let with an acre of land, the same cottage, where you also have the obligation of the landowner in regard to the land, is only £1 5s. That seems a ridiculous anomaly. Think of a house let at £100 a year, and then think of the same house with 50 acres added at £1 an acre. Under the present law the repairs allowance of the house standing by itself is £20, but directly the 50 acres are added, the allowance comes down to £18 5s. There is not a large amount of money involved but it is an unjustifiable anomaly, especially at present, when we are most anxious to bring up to date the standard of dwelling houses and agricultural buildings. If you do not give the repairs allowance you do not get the same standard of maintenance.
I have, on many occasions, heard hon. Members say how necessary it was to bring up the standard of repairs and miantenance in the villages. They realise that one of the reasons for it is that directly

you connect any dwelling house with agricultural land you have a substantially lower repairs allowance. The answer that may well be put is that this is remedied by Rule 8, because the landowner can prefer a maintenance claim claiming a larger amount than the repairs allowance if it has been expended. That claim is based on the average expenditure of five years. I think that answer substantially meets the position of the large landowner but not that of the small man. In many villages you have one man owning one farm, a couple of cottages and a shop. That type of owner does not go in for the tremendous amount of legal difficulty involved in a maintenance claim but works on his repair allowance. So it means that the small owner of property is at a serious disadvantage compared with the smaller man who only owns town property. I think, to-day especially, it is more costly to repair property in the countryside than in the town. For one thing the great factor in getting repairs done at all is transport and, if your local builders have to go from farm to farm and from cottage to cottage for long distances, the cost of repairs mounts up tremendously through the cost of transporting the workmen, if you are able to get them, whereas a man owning three cottages in one village has not that difficulty.
May I deal with another part of the Clause, concerning the question of repairs to land? This concession of a repairs allowance was given first by Sir William Harcourt in 1894. At that time I think people had a different view about land from what they have to-day. They did not realise how much repair work has to be done to keep land in condition. In fact in 1894 the drainage scheme of 1860 had given the land a fairly new drainage system. To-day all those drains are, or should be, cleaned out, which is a proper maintenance charge but a very costly one. It has gone up by 100 per cent. since 1914. The maintenance charge connected with gates has gone up by 100 per cent. since the beginning of the war. Fencing and limber charges have gone up by 40 or 50 per cent. since the beginning of the war. There is also the upkeep of roads, which has gone up by an even greater percentage owing to the difficulty of getting the stone and the labour. There is, therefore, a good case for seeing that the repairs to land are the same as repairs to


buildings. They have to be done and, if they are not being done this year, they will have to be done next year, therefore there is no argument against delaying this concession.
Although I represent an agricultural constituency, I have always desired that agriculture should not have to seek favours of the Government but should be dealt with pari passu with industry. This is a glaring case where the farmer, the landowner and the farm labourer are all affected. They are being placed at a disadvantage as compared with other industries. This Committee should remedy that. I listened to the Debate on the last new Clause, and I heard my right hon. Friend assuage my hon. and gallant Friend who moved it by saying that the new depreciation allowance would deal with that position. May I anticipate any similar defence to my case, by saying this? It is true the Chancellor is giving a depreciation allowance of 2 per cent. to both industry and agriculture—and may I say how grateful all industries are for that?—but let us first remedy this anomaly, because if the Chancellor gives a depreciation allowance of 2 per cent., added to the present repairs allowance, it will benefit industry more than agriculture.
There is no reason, so far as I can see, why an agricultural labourer's cottage should not have the same repairs allowance, whether it is let in connection with land or not. I hope that as many agricultural labourers as possible will have a field or two let with their cottages, because it is a great draw to the agricultural worker to have a few cows that he can tend in his spare time. It is what we have in the area where I live, and I would like to see it all over the country, but this repairs allowance is one of the bars to that happening. Is there any reason why a farm house that is let with land should not have the same repairs allowance as any other house of similar annual value in the country? I commend the new Clause to the Committee and hope it will clear up an anomaly that has existed since 1894 owing to different Amendments to Finance Bills.

Mr. Colegate: My hon. Friend has put the case most clearly. I should like to emphasise that the whole of the agricultural community are anxious that agriculture should be put on the same

basis as other industries and that these anomalies should be ironed out. I do not think there can be an answer to my hon. Friend's argument about the different treatment between a house not used for agriculture and a house that is used for agriculture. Some people may boggle at the idea that land needs to be repaired. There exist certain people who tell you that God has given the land. He may have done, but He gave it in the form of bog, wood and so forth. The land as we know it in this country for agricultural purposes is not merely a manufactured article, but a highly manufactured article, and it has to be kept in repair from year to year and often at shorter intervals. It must be kept up, and the repair of the land is one of the most expensive that has to be done, especially in connection with drainage. It is urgent that this anomaly should be cleared away at this time. It is a very small concession and the total amount of money involved is not appreciable in a national Budget of this size. It will put a little piece of injustice right and will enable the agricultural industry to be put on the same basis of efficiency as regards its buildings and land as industry in general.

Mr. Benson: I welcome the speeches to which we have just listened. The idea that agriculture should be put on the same basis as industry, is something that I have advocated here for a long time. For years I have been suggesting that Schedule D should go, and that the right of the agriculturist to dodge backwards and forwards, between Schedule B and Schedule D, should be abolished. I have, however, never before heard any suggestion that the agricultural interests were prepared to support me. Moreover, I understand now that they are prepared to give up the concession that all rates on agricultural land shall be paid by somebody else other than agriculturists, and that they shall be put on the same basis as industry and pay 25 per cent.—

The Temporary Chairman: The hon. Gentleman has gone far enough in his illustration.

Mr. Benson: I was only welcoming the change of heart in agriculture. If I can be assured that the change of heart is real, I am willing to support the new Clause.

Major York: May I support the new Clause, particularly in relation to one thing which my hon. Friend the Member for Thirsk and Malton (Mr. Turton) has said? It is a small amendment to the Income Tax law and will help the small owner and the man who does not use the maintenance claim. If the larger owner who puts in a maintenance claims gets this concession, it will mean that the Treasury will be no worse off because the amount that is deducted under the new Clause will not be deducted under the maintenance claim. As regards the case put forward by my hon. Friend that the new Clause will remove an anomaly, I think that my hon. Friend the Member for Chesterfield (Mr. Benson) has the support of most Members of this side. We want to see agriculture put on the same basis as other industries both as regards labour and materials and the general running of the industry.

Mr. Assheton: The Committee knows, I think, that I am as anxious as any one to improve the conditions under which agricultural landowners can adequately maintain their property, but I feel that the hon. Member for Thirsk and Malton (Mr. Turton) has put forward a proposal which is really not necessary. It is sometimes forgotten that this flat-rate allowance is automatic and that, whether or not money is spent on the repair of property, the flat-rate allowance is allowed as a deduction. There is a certain lack of principle in that, and I should not be anxious to see that lack of principle extended. It may be necessary to allow what exists to be continued as it is, but by far the most sensible plan is that under which the actual amount of expenditure on repairs is the amount which is allowed as a deduction from income. The present law allows that. My hon. Friend admitted that by making a maintenance claim the owner of agricultural property can obtain what he spends on the average on maintenance over a period of five years. The difficulty he felt was that the smaller owner was handicapped because he did not perhaps have quite as much experience in filling up the necessary forms and did go to the trouble of making a claim of this sort to the Income Tax inspector. I cannot help feeling, however, that it would not be the wish of the Committee that we should extend a privilege which really has a certain lack of principle in it.
The other point which my hon. Friend made was that land was treated differently from houses. That is true enough. You get a smaller percentage allowance for land together with buildings than for houses alone. It is clear that the reason is that there is only one Schedule A Assessment for both the land and the farmhouse. If there were a large farm the assessment of which was perhaps £500 a year, it would be rather ridiculous to bring that into the same category as a small house in the town.

Mr. Turton: Is my right hon. Friend suggesting that if you have a house and land worth £500, you would not expend over £100 on repairing the buildings and the farm?

Mr. Assheton: Not at all. What I am suggesting is that when there is a single assessment both for land and buildings that there may be a great deal of land and not many buildings, or there may be not much land and a great many buildings. It is therefore inappropriate to suggest that you should apply the one-sixth rule to them. In some circumstances it might be desirable and in other circumstances it would be undesirable.
Take, for example, a farm which has 1,000 acres of sheep run attached. The amount of expenditure on that farm might not be nearly as much as in the case of a farm which had, say, Too acres attached to it but was used for milk production and the buildings on which were very extensive. I ask the Committee to accept the view that it is much more reasonable that the present system should obtain, and that is that the amount of money spent upon the particular farm and buildings, averaged over a number of years, should be the amount to be deducted from the income. I do not think there is any sort of grievance here for landowners, either small or great. Although there are several observations which I hope to make on the other Clauses which will help my hon. Friend, I ask the Committee not to accept this Clause.

Mr. Turton: I am surprised and disappointed. Although I have a great admiration for the debating powers of my right hon. Friend I do not think he has acquitted himself well. He said that he did not like this flat rate allowance


and therefore would not extend it. In agricultural villages, small houses with an acre of land attached have this small repair allowance. I am not arguing in favour of the big estate-owner; he can look after himself. It is not right to say that all men can make up maintenance claims. I would ask the Chancellor or the Financial Secretary whether the Inland Revenue find that the small owner, the man who owns one house or two or three cottages, ever troubles to make out a maintenance claim. If they do, my proposal is unnecessary, but to the best of my knowledge and belief that is not done. Those men are at a disadvantage against the rest of the community and I should have thought that, either now or later, the Chancellor of the Exchequer might put that anomaly right.

Question, "That the Clause be read a Second time," put, and negatived.

NEW CLAUSE.—(Amendment of Rule 8 of No. V in Sch. A.)

The following Section shall be substituted for Section twenty-five of the Finance Act, 1924:
Rule 8 of No. V in Schedule A shall have effect as if at the end of paragraph (2) thereof there were added the words "and shall also include additions or improvements to farmhouses, farm buildings, cottages or land, but only if no increased rent is payable in respect of the additions or improvements and in so far as they are made in order to comply with the provisions of any statute or the regulations or bylaws of a local authority or the directions of any county war agricultural executive committee.—[Mr. Turton.]

Brought up, and read the First time.

Mr. Turton: I beg to move, "That the Clause be read a Second time."
Again, this is repeating the wording of the present Rule 8, with two exceptions. The object of the Clause is to bring Rule 8 up to date, owing to changes in administration of agriculture and the different nature of the improvements of land that are being demanded by Statute or by-law or by directions of the county war agricultural executive committees. The two alterations proposed in the new Clause are the words:
 include …improvements to …land,
which at the present time you cannot get any relief for, and also the words:
improvements…made by directions of any county war agricultural executive committees.

Let me take the second of those two changes first. It can be said that the Inland Revenue have been as helpful in the past as they could in this direction. Wherever possible, they have tried to argue that a direction by an agricultural committee was similar to a by-law of a local authority, and they have brought it in in that way. I never like to see the Inland Revenue strain the law, whether in favour of or against the taxpayer. The correct thing to do is to put the law clearly in an Act of Parliament so that all taxpayers may know what the law is. If an improvement is ordered by direction of an agricultural committee, which is the modern method of improving agricultural holdings, it is only right that the improvement should be allowed to be included in the maintenance claim. The only reason it is, is that when Rule 8 was invented there were no such things as these agricultural committees. I leave that part of the argument with those words.
Why have I brought in improvements of land? The only improvements I am asking to be allowed for in the maintenance claims are those where no increase of rent is being charged and where the improvements are being made by reason of a Statute or by-law or by direction of an agricultural committee. The type of improvements of which I am thinking are a new drainage system, which is being done everywhere in the country, and the ordering of new roads to connect agricultural land for the purposes of changes in agriculture. There are other improvements in the land being ordered in connection with the Minister's policy of improving agricultural holdings by changing the nature of the agriculture that is carried on. I submit that the proposed new Clause is reasonable and I ask the Government to accept it.

Mr. Assheton: I think my hon. Friend is on a good point this time. The Board of Inland Revenue have been considering this question of county war agricultural executive committees, and they have come to the conclusion that they are justified in treating their directions as coming within Rule 8. They therefore feel that it is unnecessary, in regard to this point, to move the proposed new Clause. On the question of land raised by my hon. Friend, he referred on his previous new Clause to maintenance expenditure spent year by year to keep land in repair. Here


he is referring to improvements. Improvements of land fall to be discussed in connection with the changes which my right hon. Friend the Chancellor of the Exchequer is proposing to make later on, when he brings in a Bill in connection with the developing of industry and agriculture. It would be premature to discuss the matter, because the whole of it is under consideration. I am not in a position to say what view my right hon. Friend would take, but the point which my hon. Friend has made will be taken into account. When the time comes, there will be plenty of opportunity for discussing it. I hope the House will agree that it is not necessary to press the the proposed new Clause now.

Mr. Turton: Would my right hon. Friend make something quite clear in the first limb of his reply? I gather that the Board of Inland Revenue agree that the direction should be included, but surely that should be done by Statute, or is it just to be done by a gentlemen's agreement with the Board of Inland Revenue?

Mr. Assheton: They accept the position that it is within the Rule.

Wing-Commander James: Arising out of what the Financial Secretary said, that the allowance would be made if work was carried out to comply with the Statute, would it be held that if, in order to produce attested milk, a farmer converted a building, that would be covered by the definition he has just given as for work under a direction by a county war agricultural committee?

Mr. Assheton: I would rather not offer an opinion on that. The answer is not always the same. The hon. and gallant Member had better see in each case what the answer will be, as circumstances vary.

Mr. Colegate: I am very grateful to my right hon. Friend for this concession, but it really would be very much more satisfactory if these words were added in the sense of the Clause. I cannot see there is any difficulty about it. It would be better than relying on these gentlemen's agreements about what is included and what is not. Perhaps at a later stage it could be included.

Mr. Assheton: This is accepted as being the law and in any case my hon. Friend will, I know, appreciate that the Clause

he has moved now cannot be accepted for the reasons I gave with regard to the word "land." I think it would be better if the new Clause were withdrawn.

Mr. Snadden: There is one point on which I am not quite clear. Do I take it that this concession is only to be made where an actual direction has been served? There are cases where, owing to the demands of county committees for extra cultivation, although no direction has been served to provide, say, a house for extra machinery, the person who has to carry out the cultivation, and is bound to carry it out, does not receive a direction to build a house for machinery but to carry out the cultivation. If a producer of food can prove to the Revenue that he has received an order necessitating an extra building to house machinery, for example, will that be considered in the same way as if a direction for the building had been received? I know quite a few cases where some expenditure has been incurred to meet the directions of county committees, and they can get no relief, because the new building is needed to house extra machinery.

Mr. Assheton: I am afraid that the undertaking I have given only covers directions by the country war agricultural committee.

Major York: May I press my right hon. Friend on this point? In the various Income Tax districts there is a great variety of procedure. I think that is commonly known. If we had the words which my hon. Friend suggested there could be no doubt about it, and land owners throughout the country who are members of the C.L.A. organsiation, would get the amendment in their journal, which would give the words, and make the position clear to everyone concerned. If this is left to be included in the Rule by agreement, the people concerned will not know about it.

Mr. Assheton: My hon. and gallant Friend has made a not unreasonable point, and he can rest assured that all Inspectors of Taxes will be informed about it.

Mr. Turton: In view of the assurance which has been given, I beg to ask leave to withdraw the Clause.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(Maintenance relief in excess of Schedule A assessment.)

Repayment of tax under Rule 8 of No. V in Schedule A may be made where the excess cost of maintenance, repairs, insurance and management is more than the amount of tax paid in Schedule A assessment, provided that it is not greater than the total amount of tax paid in respect of Schedule A, Schedule B, Schedule C and Schedule D assessments.—[Mr. Tartan.]

Brought up, and read the First time.

Mr. Turton: I beg to move, "That the Clause be read a Second time."
The last of these three Clauses deals with the question of maintenance relief in respect of Schedule A assessment. The present position is that whilst it is true an owner can make a maintenance relief claim in respect of expenditure which is actually incurred and obtain relief on the average cost of maintenance for five years, it is limited by the amount of the Schedule A assessment. Therefore a small man who has in the course of the five years an average expenditure more than the Schedule A assessment which is incurred by using money he has from other sources than the land, he is prevented from recovering that maintenance relief. The larger state owner is all right because he ha a large enough capital under Schedule A to cover his maintenance costs. This seems to be an anomaly.
I notice that in the Budget Statement of the Chancellor of the Exchequer, he acknowledged that, by saying, with regard to the depreciation allowance provision, that that point would be covered. It seems right that we should try to cover this anomally with regard to maintenance relief. I ask the Government to give this concession. It will not cost them very much, but it will enable more money to be spent on the maintenance of the land. It is vitally important that money should come to agriculture from other industries. There is nothing wrong in the town-dweller coming and spending his money on the countryside. One of the reasons, although a small one, why we have suffered a bleeding of money from the countryside, has been that the maintenance claim was bound by the amount of the Schedule A assessment. I ask for freedom, so that the maintenance claim relief can be given on what is actually spent, from whatever source the expenditure comes.

Mr. Assheton: As the Committee will remember, my right hon. Friend in his Budget speech did announce that the farmer would get the same relief as that to be given to the ordinary industrialist under the new scheme, and that the agricultural landowner would be treated as a co-partner, as it were. In so far as the landowner bears expenditure on agricultural development
he will qualify for similar relief against not only the income drawn from the land, but against any other income liable to tax."—[OFFICIAL REPORT, 25th April, 1944; Vol. 399, c. 675.]
I think that the statement in the Budget speech was linked up rather with the initial expenditure allowances on plant, machinery and industrial buildings. I should like to make it clear that, following the recommendation of the Committee of Inquiry set up by the late Chancellor, it is proposed by my right hon. Friend in the forthcoming legislation for the postwar period to provide that in the case of expenditure on the development of the agricultural industry the present restriction of the relief to the amount of the Schedule A tax should be removed, and that, where the amount qualifying for relief exceeds the Schedule A assessments for the year of claim, the landowner should be allowed relief on the balance against any other taxed income that he has for that year, and, if necessary, a carry-forward against taxed agricultural income for the six subsequent years. That would give the agricultural landowner similar treatment to that which a trader can obtain in respect of a trading loss. I think the Committee will agree that this is reasonable. I should be obliged if the hon. Member would withdraw his Clause.

Mr. Turton: In view of that assurance, I beg to ask leave to withdraw the Motion.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(Computation of profits of a stud farm.)

Where the owner of a stud farm races horses bred by him he shall be entitled to claim that for income tax purposes the training and racing of his horses shall be treated as forming part of the business carried on at the stud farm and that accordingly the relative receipts and expenses shall be taken into account in computing the profits of the stud farm."—[Sir B. Glyn.]

Brought up, and read the First time.

Sir Ralph Glyn: I beg to move, "That the Clause be read a Second time."
I do so in a very few words. I think the Committee will appreciate that the bloodstock industry in this country is a very important one to the export trade. People do not realise that the export of bloodstock is peculiar to this country. We believe in its value because of its high reputation. During the war, inevitably, there has been a diminution of bloodstock, and the purpose of this Clause—I attach no great importance to the actual wording and it is extremely difficult to word—is to help to restore the position. It should be recognised that a stud farm is no use unless you can test what the progeny which comes off that stud farm can do. The only way you can do that is to match these animals on a racecourse. For the purpose of racing, unhappily, this country offers very meagre prizes: the stakes are lamentably low. Many years ago, I piloted through this House the Betting (Control) Bill, which established the totalisator, the main purpose of which was to increase the stakes offered for those who were breeding bloodstock in this country. I wish that the Tote Board had been able to increase the stakes more than they have done; and I hope they will do so. In the meantime, I hope that the Chancellor will look at this Clause favourably.
I hasten to assure hon. Members that I am not getting up to ask that those who bet, in any walk of life, should have any taxation advantage—far from it. What I am asking is that those who are engaged in this very important business should be recognised as part and parcel of the industry. It is no use hon. Members thinking that anyone can start a stud farm without racing, because he will never get any stallion fees. I would ask the Chancellor, if he cannot accept this Clause, to give the whole matter favourable consideration before the Report stage, in order to give the relief which is so necessary. The Committee probably realise that during this war it has been the practice of the Germans to take from France the best bloodstock that that country has got. They have been racing continuously in Germany, in order to improve the bloodstock, and they are very anxious to capture from us whatever they can of the bloodstock trade. I am sure there is no Member of this Committee who

would not prefer to see the bloodstock of the entire world fertilised from this country, and to see foreign countries come back to us to get the best possible blood-stock.

Mr. Benson: I looked very favourably upon this Clause until I heard the hon. Member for Abingdon (Sir R. Glyn) put his case. The way he excludes betting and the bettor simply horrifies me. We know perfectly well that racing could not be carried on in this country if betting were abolished. It really means that every person who goes to the Derby and loses £5, is helping to maintain the whole system of racing, which my hon. Friend says is essential to the breeding of livestock. If the punter is helping to maintain racing, and, therefore, blood-stock, I do not see why he should not be able to put against his Income Tax the expenses which he is incurring in the maintenance of bloodstock any more than the breeders may put their expenses.

Colonel Sir Charles MacAndrew: I rise to support the proposed Clause. I would point out to the hon. Member for Chesterfield (Mr. Benson) that if people were going to be allowed to charge losses on betting—

The Deputy-Chairman (Mr. Charles Williams): I have recollections of a Tote Bill which was passed by this House. I hope we shall not have a repetition of that Debate to-day.

Sir C. MacAndrew: In that case I will not reply to my hon. Friend. The breeders of bloodstock are taxed on the profits of their stud farms. That is quite reasonable. The bloodstock, especially the fillies, have to be run in order to find out which animals it is best to breed from, yet the racing expenses cannot be set off against the profits of the farm; and, therefore, the breeder is getting the worst of both worlds. The bloodstock industry is a valuable asset to this country, and there will be a great opening for us after the war. As my hon. Friend the Member for Abingdon (Sir R. Glyn) said, this Clause is, no doubt, drafted in language which my right hon. Friend will not accept, but we particularly framed the Clause so that if a man does not want to avail himself of it he is entitled to ask the Revenue authorities not to treat racing as part of his business. Obviously, he will have to


say in advance which way he wants to be taxed, but I think it is a very reasonable Clause, and I hope that, in order to help this industry, it will be accepted. I have a letter from a breeder, which says:
Racing is a vital part of breeding, especially as regards fillies, and should be treated as forming part of the business.
I hope that the Chancellor will be able to agree to that.

Mr. Tinker: If the hon. Member for Abingdon (Sir R. Glyn) had wanted to divide the Committee, he could not have brought forward a more suitable question. We, on this side, look upon racing as being a rich man's pleasure. [HON. MEMBERS "No"] I do not know whether that is right or not, but we look upon horse-breeding as being a way of getting rid of surplus cash. I challenge hon. Members opposite to give an instance of anybody who has attempted horse-breeding without having first made money in other directions, using horse-breeding as a method of getting rid of surplus money. When we are engaged in a war, and do not know where to turn for money, it is absurd to suggest that more money should be available for horse-breeding. We hear many cheeky appeals, but I do not know of any which is less likely to appeal to people than this. Surely those people who go in for this kind of thing ought not to come to the State for help. If the Chancellor were to hold out any hope to the supporters of this Clause—and I know he will not do so—what would be the feelings of those of us who have asked for help for the blind?
We have not succeeded in that. What would be the feelings of the country if by any chance this were carried? It would be in their minds that, in times of stringency, the House of Commons had given the rich man some concession, because when you talk about horse racing it means very wealthy people. In the interests of the country, I hope hon. Members on the other side will not make any further speeches on this matter. To my mind, it is wasting the time of the Committee and creating a position in the country that will do no good at all. I should like hon. Members to wait for the Chancellor's reply, which will be, quite definitely, that he will do nothing.

Mr. Astor: I am afraid that neither the hon. Member for Ches-

terfield (Mr. Benson), nor the hon. Member for Leigh (Mr. Tinker) has given very much thought to the economics of horse-breeding. The hon. Member for Chesterfield probably does not realise that most big breeders do not go in for betting, anyway. Certainly, my family never had a bet, and betting has nothing to do with breeding. It has been said that we have to increase our exports after the war. We cannot pay for our social services or anything else unless we can get back our export trade. The export trade in thoroughbred racehorses has been a very steady and solid national asset for generations. Breeders from all over the world have come to England to buy mares or stallions, and, while no one pretends that it is a vast industry, it is yet a perfectly solid gain to the country. No breeder would think of buying a horse unless it has been tested on the racecourse. We have all seen horses with impeccable pedigrees, and which made magnificent oil paintings, but which proved to be utterly useless on a racecourse. No buyer of thoroughbreds would buy a horse unless it has been through the mill of racing, and that is why racing has been kept on during the war. If you cut off racing for two or three years, it would be quite impossible to keep up breeding and to find the right kind of horses from which to breed. It is not only an economic asset in the balance of trade of this country, but it is a great prestige asset all over the world, like people going to France to buy ladies' dresses or wine, and it brings visitors to this country and in that way acts as an invisible export. People come here and spend money on racehorses, and all over the world it is a factor in keeping up English prestige. I need hardly say that it is a sport which is shared by all classes, and especially in the North of England. It is not only the very rich man who breeds horses, but people of quite moderate means keep a horse or two.

Mr. George Griffiths: It takes them all their time to keep a dog.

Mr. Astor: If we recognise that it is a desirable industry and a national asset, and that it has been recognised by the Inland Revenue as such, it is only fair that racing and breeding should be regarded as one business, because there is a great danger, which a great breeder was pointing out to me to-day, that if


you are too hard on the stud farms you will do more harm than is desirable in the long run, because some breeders might decide to sell particular horses which really ought to be kept as foundation animals for the future generations whose products we shall want to sell abroad. I hope hon. Members will understand that it is not a question of relief for the rich, but of keeping up a national asset which will be very useful to the export trade after the war.

Mr. Evelyn Walkden: May I mention to the Committee, speaking as a representative of an area which publicly owns a racecourse, that I believe the Committee would expect me to support the hon. Member for Abingdon (Sir R. Glyn) and the hon. Member for East Fulham (Mr. Astor), but I can hardly believe that the ratepayers of my division, who may derive a little profit out of the racecourse, will feel enthusiastic about this new Clause.

Mr. Astor: How would they feel in the hon. Members division if racing finished and they never had another St. Leger run at Doncaster?

Mr. Walkden: Quite truthfully, I would prefer to stand or fall by the decision of the electors of Doncaster, or of this country, if you like, on whether horse racing should continue or not. I do not think it would matter very much. I have been in countries where they are not interested in gambling. Holland has quite healthy racing, but no betting. Whatever they may do in Holland, they are good citizens and they are on our side in this war. The Dutch are undoubtedly glad to be with us because they recognise the same fundamental principles as we do, and their conduct is somewhat similar to our own. The position we are being asked to face is that the wealthy man shall be given some kind of benefit at the expense of the taxpayer because he runs a stud farm. I cannot agree with this. If you are to carry it to its logical conclusion, what about the men in my division, or in the divisions of the hon. Members for Hemsworth (Mr. G. Griffiths) and Leigh (Mr. Tinker), who produce whippets ? The whippet is his racehorse, and, although he has a flutter on the Derby or the St. Leger or the Grand National, he certainly takes a

keen interest in his whippet. It is the only hobby that he can afford, and, undoubtedly, that man would feel that, if Lord Derby or Lord Astor—

The Deputy-Chairman: I am sorry to interrupt the hon. Member, but I think we must keep off whippets.

Mr. Walkden: I submit, with respect, Mr. Williams, that stud farms are not only associated with what Lord Astor or Lord Derby conduct. We, too, are interested in stud farms.

The Deputy-Chairman: That may well be, but it is not in this Clause, which mentions horses, and we must keep entirely to horses.

Mr. G. Griffiths: On a point of Order. It is only an illustration, Mr. Williams, and what about racing pigeons?

The Deputy-Chairman: No; I think that, if we once begin an argument on whippets, it will go much too wide. The illustration has gone quite far enough.

Mr. Walkden: Would you agree, Mr. Williams, to a comparison with the maintenance of homing pigeons? After all, the workers have maintained stocks of homing pigeons which have done very well in this war.

Mr. G. Griffiths: And helped the Government.

Mr. Walkden: Yes, and helped the R.A.F. I know the arguments of the hon. Member for Abingdon and other hon. Members. They are that there was no greater or more valuable commodity to compare with a racehorse when the cash-and-carry arrangement was made and President Roosevelt told us "You can have the goods, but you must pay cash." Whisky was not more valuable than racehorses, and there was not much radium, so we chose racehorses, and it will be well known to the Members of the Committee that there were one or two racehorses exported which were equal to two bombers. One horse meant two bombers to us. I appreciate the argument, but I do not know of anybody who is exporting radium or platinum or any other commodity who would come along and say, "You ought to exempt me from tax because I am running a business."

Sir C. MacAndrew: He is not asking to be exempt because he is running a


business but to be allowed to offset part of his business run at a loss.

Mr. Walkden: I use the term "running a hobby," the hobby being that of producing horses for export. We have always maintained in this Committee, that whatever a man wishes to do with his money is his business, but if he enters into something which is really regarded by the State as necessary for the well being of the State can he come to Parliament and ask for recognition?

Mr. Astor: They are not run as hobbies. Most stud farms are run as limited companies and have been recognised as businesses for years by my right hon. Friend the Chancellor of the Exchequer.

Mr. Walkden: It may be that the hon. Gentleman regards it as a kind of business.

Mr. Astor: It is not me, but the Treasury.

Mr. Walkden: No one on these benches owns racehorses so far as we know.

Earl Winterton: What has that to do with it?

Mr. Walkden: It has everything to do with it. Many of us are shareholders in co-operative societies, building societies and in various forms of property, which are undoubtedly serving the people in a manner that this Committee and the country expects, but we do not ask for relief unless the rest of the community benefit in the same manner. We therefore regard this suggestion as being wholly unreasonable, and we feel that the Clause ought not to have been put upon the Paper. Hon. Members will be doing a good service to the community if they withdraw it altogether, before the Chancellor replies.

Mr. Assheton: This Clause raises the issue of the Income Tax treatment of the owner of a stud farm for the breeding of thoroughbred horses who races horses which he breeds. He is chargeable to Income Tax on the profits of the stud farm, including stallion fees, but unless he can show that his stud farm activities and his racing is part of a single commercial enterprise—and of course very few owners of famous studs can show that—the results of his racing activities are outside the

scope of the Income Tax. So he is taxed on his stud profits without set-off for any excess of the cost of training and racing horses over receipts in the form of prize monies, although he may be able to show that the breeding and rearing on the one hand and the training and racing on the other are intimately connected, in the sense that it is on the racecourse that the merits of the progeny of his stallions and mares are tested and displayed, and that training and racing are therefore essential to the successful operation of the stud farm.
It is true, as my hon. Friend the Member for Abingdon (Sir R. Glyn) said, and as was confirmed by other hon. Members, that it is important that the export trade in thoroughbred horses should be maintained and, after the war, increased. It is important that we should get as much foreign exchange as we can, and dollars are very important. I do not think that the Committee would wish to be prejudiced against these proposals by the fact that well-to-do men engage in this particular activity. Hon. Members must recollect that breeding horses, and breeding most animals, is a very chancy business, and it is not surprising that people with money are more often engaged in it than people who have not much money.
But I think that the Committee feel, as do the Government, that this is not the moment to make a change of this sort. It has been useful for my hon. Friend to have raised this matter, and I do not think that it is a matter which we as a Committee ought to view with any prejudices. We ought to look at it in a common sense and business-like way and do the right thing irrespective of any prejudices. I hope that my hon. Friend, in view of what I have said, will be good enough to withdraw the Clause, and that possibly one day, after the war, he may have a more favourable opportunity of moving such a Clause.

Sir R. Glyn: I regret rather that my right hon. Friend has assumed that the whole views of the Committee are along the lines he now suggests, but I feel, after all, that he alone can judge. I trust that the Chancellor will not put the idea of doing something to help the export of bloodstock from his mind and will take a suitable opportunity to introduce the matter again. I beg to ask leave to withdraw the Motion.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(Extension of Provisions of Section 33 of the Finance Act, 1926.)

Where it is proved to the satisfaction of the Commissioners of Inland Revenue that any trade, profession or vocation, to which this Section applies, has been temporarily discontinued under the following conditions;—

(a) that a prohibition has been imposed under any War or Defence Regulation preventing its contiinuance;
(b) that the stock in trade of the said trade, profession or vocation, could not be realised;
(c) that the person carrying on such trade, profession or vocation, had losses to carry forward to which the provisions of this Section would have applied, if the trade had not been so discontinued;
it shall be lawful for the said Commissioners to grant such relief as is just, having regard to the circumstances of the case and to the period of the prohibition, by extending the period within which such losses may be carried forward and set off against subsequent profits, but so that such period shall not exceed a period of five years from the sixth day of April following the date at which the trade could have been resumed.—[Mr. Craven-Ellis.]

Brought up, and read the First time.

Mr. Craven-Ellis: I beg to move, "That the Clause be read a Second time."
I have put down this Clause in the belief that it will benefit those who have suffered hardship due to war restrictions. I refer to the men who have joined the Forces. Many of these men have no doubt been in business, and before joining the Forces probably showed a loss on their businesses. The war has continued for nearly five years, and if the war were to end this year, it might well be that, when the men whom I have in mind have been demobilised, it will be two years before they can restore their businesses and get on to a profit basis. In these conditions, these men, under Section 33 of the Finance Act of 1926, would be statute barred. Service men are not the only men affected. There are industries which have been going through the processes of concentration. There are men who have had their premises blitzed and have been unable to restart in business and have suffered losses in consequence. The outstanding cases are those where businesses have been closed as a result of Government policy. The case which stands out in

my mind as being the one which is perhaps more greatly affected than any other is the building industry. Immediately the war started most house building had to close down.
Many of these firms have properties which were partly finished, and many of these builders whose balance sheets were prepared subsequent to 3rd September, 1939, have shown losses. Unless this new Clause is accepted, those men will not have the benefit of the losses which are already on their balance sheet when they come to start again, because of their being statute-barred. There are other considerations. It may well be that many retailers will have to obtain a licence to enable them to restart their businesses, and as consumable goods will undoubtedly be short, these licences may not be granted very readily. Six, seven, or even eight years since 1939 may elapse before these men who are showing losses are again allowed to enter business. Then there is the case of industry, especially the building industry, where supplies will no doubt be on priority. That means there will be delay in the resumption of business due to the shortage of supplies which will have to be handed round by priority certificates. I submit to this Committee there are quite a large number of cases worthy of having consideration in accordance with the proposals of my Clause because they are definitely suffering hardship as a result of war restriction and limitation.

Mr. Assheton: The question of extending the six-year limit in Section 33, either generally or in relation especially to the circumstances of the war, is one which has been raised on previous occasions, and it was brought up in the time of the late Chancellor of the Exchequer. He told the House that he had noted the suggestion, made in view of the special circumstances of the war, and that it was one of the many taxation matters which would require consideration at the end of the war. I think it is quite clear that if it were decided ultimately at the end of the war that some extension of the six-year period was desirable, the provision would have to be in very much wider terms than those drawn in this present Clause, and I think the Committee will agree that in any event this is not the appropriate time for making such a change. I can assure my hon. Friend the


Member for Southampton (Mr. Craven-Ellis) that the matter he has raised will be noted for consideration in conjunction with these other technical matters that will have to be considered at the close of the war.

Mr. Craven-Ellis: While I thank the right hon. Gentleman for what he has said, is there any justification for people losing rights which were given to them under the Finance Bill of 1926 because of something they have had no control over themselves, and which is due to the war? It is upon that basis that I plead to him. It may be that my new Clause is not in the terms which he would desire. I am not going to quarrel about that but, on the question of principle, I submit to him that it would have given more encouragement to the men for whom I am appealing if he had been a little more generous in his indication of what may be done in the future.

Mr. Assheton: I must tell my hon. Friend, as I said before, that I appreciate the great hardships which have been suffered in cases of this sort, and this is one of the matters which we hope to consider when the time comes. That is all I can say now. I hope the Committee will be good enough not to accept this Clause, and perhaps my hon. Friend would even be so good as to withdraw it.

Mr. Craven-Ellis: In view of what has been said, I beg to ask leave to withdraw the Clause.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(Relief for lower grades of unearned incomes.)

The personal allowance of single persons whose yearly income is solely investment income and Which income is not less than one hundred and forty pounds but is less than two hundred and sixty pounds shall be increased from eighty pounds by instalments of one pound for every one pound the income is less than two hundred and sixty pounds but it shall not exceed ninety-five pounds; and the personal allowances of married couples without children whose yearly income is solely investment income under three hundred and twenty pounds shall be increased from one hundred and forty pounds by instalments of one pound for every one pound the income is less than three hundred and twenty pounds but it shall not exceed one hundred and fifty-five pounds.—[Dr. Russell Thomas.]

Brought up, and read the First time.

Dr. Russell Thomas: I beg to move, "That the Clause be read a Second time."
This Clause is directed to giving relief to persons who have only a small unearned income. I will explain it a little more clearly than it appears on the Order Paper as I go along, but I want to make this point before I begin. The Chancellor said early to-day that the arguments which have been brought up on a certain matter were the same this year as last year and that a particular case before the Committee was neither stronger nor weaker than it was in the past. Personally, I think with deep respect, that is a very weak thing to say, because the suggestion is that the Committee should not proceed to rectify a matter because the case is no stronger this year. If an injustice exists over a long period of years and the Treasury cannot see its way clear to rectify the injustice, then it is the duty of this Committee. to press the matter until the injustice is removed.
The lot of the particular class of people for whom I am speaking to-day becomes harder every year and more difficult as the war goes on. I am bound to quote a few figures wearisome as I know them to be in order to make my case. Single persons with an unearned income of £200 in 1941–42 and since pay £39 tax. In 1939 they only paid £8 6s. 8d. That is a large sum for a person with £200 a year. A married couple without children who had an income between them of £300 a year in 1939–40 paid £10 in taxation; in 1941–42 and since they have to pay £52 a year in taxation. I do not want to dwell on this side of the question very much because I have been making my points now in regard to these matters for the last two or three years regularly, and it would be foolish indeed to go on repeating them. However, their position is getting worse and worse. They have had no help of any kind since the war began and no one has given them encouragement while all sort of burdens have been added to them. I have said before, and I am going to make these points again, they often have war damage payments to make in addition to their taxation and they are not helped by the Rent Restrictions Acts, the cost of living is still rising, and it may go up still further this year. Their commitments remain constant. Many of them have small mortgages to pay and other have small life assurances which they are trying to keep alive.
All these people, with the low taxation of 1939, could have gone along quite happily to the end of their days but the war has altered all that. Letters have been sent to me—I do not want to capitalise sentiment at all—telling me that they have had to leave the old homes where they had brought up their families and have gone to live in rooms. They have had to sell their furniture to meet certain unavoidable expenses, and they have had even to dig into their capital. I will not go into the matter more than that. The relief given to these people at present is, in the case of a single person, a personal allowance of £80 a year; in the case of a married couple it is £140. In this Clause I suggest that the personal allowance be raised by£15 in both cases—to £95 in the case of single people and to £155 in the case of a married couple. The personal allowance, as hon. Members will remember, was £100 for 1939 in the case of single people; £180 in the case of a married couple.
It will occur to Members at once to ask, Why have I not sought to raise the personal allowance for married couples to a rather higher level? They might ask why a single person is scoring over married couples. All the time I was trying to frame this Clause—and it was a difficult thing to do because it involved trial and error methods, and arithmetical calculations—I tried not to impinge on the general principles of taxation. That limited me greatly in what I set out to do. Anyway I have given married couples a longer range of income for relief. I had to keep in mind the difficulties of administration, and the difficulties of the inspectors. I had to be equitable to others. Therefore, I could not, in my Clause, say simply, that a single person should be relieved up to £245 and married couples up to £305. I had to make it a little more complicated.
Although I have, in the case of the single person, given a personal allowance up to £245, in order not to be inequitable, I had to scale that off as it were to £260, because if I did not do that it would mean that a person with an income of £246 would be worse off than a person with an income of £245, that is if the extra personal allowance I suggest was from the top figure suddenly dropped off altogether. If

the full allowance as suggested by me was given to a single person up to £245 at £246 it would drop by £1, at £247 it would drop by another £1 until at £260 it would disappear altogether. That means that the full £15 allowance to be granted on the first £245 of income and after will decrease up to £260 when it will disappear. I have chosen the figure of £245, because hon. Members will see that if the £80 personal allowance now allowed is taken from £245, it will leave £165. I did not want to impinge on the 10s. rate so I had to keep it at that level. There is another point in regard to single persons. A single person pays tax on everything over £110. I have chosen, in the case of a single person, the lower level of £140 below which he will not get benefits, and I had to do that otherwise unearned income below that would be less than earned income.
All this is, no doubt, very trying to the Committee but it is my duty to put these points to the Chancellor, whether or not they are wearisome. The considerations I have mentioned in regard to a single person will apply in the case of married people without children. There is no lower limit in their case as reduction of taxation by an extra allowance does not put them in a better position than those with earned income at the lowest levels, so there is no necessity to have a lower limit. They will always pay more at every point, right up to £305, but the Committee will see that I have scaled it off to £320 so that the person with £306 per annum will drop£1 with £307 per annum will drop another £1 and so on until at £320 it will disappear. The full benefit of this to these parties will mean that they will benefit in hard cash by £4 17s. 6d. per annum. This is not a great amount but it is, nevertheless, a very valuable sum if the income of a person is, say, only £200 a year. Many of these people have never been able to buy clothes to replace old clothing and the like and this extra sum will make their lives very much easier. Pro rata it is something which, to them, must be very valuable indeed. I am not asking the Chancellor for much, it will not make a great deal of difference and at no point in the scheme I suggest has unearned income any benefits over earned income. All the way through these people will still pay more than those who are earning their living tax.
Of course, I cannot, with my own resources, say whether there are not certain snags which I as an individual, standing on my own feet, as it were, have overlooked. The Treasury are far better able to judge than I am, but if they admit the principle they must come to my rescue later, perhaps on the Report stage, if they are not prepared to accept the Clause as it stands, and be prepared to make such adjustments as are necessary that will meet, more or less, what I am asking for now.
I expect that one argument which will be put forward against me is an argument we have heard before—that we are going through a difficult time and we must be careful about inflation. It will be remembered that other claims have been put forward recently for increases of pay. It was announced at first by the Secretary of State for War, in response to a request for increased Service pay, that the cost would possibly introduce an inflationary condition. I do not believe that that statement was right. Claims have been made by pensioners of various kinds, ex-civil servants and so on, and the Chancellor has to a great extent given way. Although we hear that this year prices will probably go up owing to the present state of our internal financial structure, nevertheless, the Chancellor has slowly given way and in some respects has met the demands. But in this particular case I do not think the inflationary argument can be used, because many of these people have been so poor since the war began that they have not been able to take up their full rations. Many of them have not always had their full food points ration. A large proportion of them have not had anything like the full amount of the clothes ration and so on, so there is a long way for them to go to absorb the goods they are really entitled to and which are available before the inflationary argument comes in. There is also the question of the Purchase Tax.

The Deputy-Chairman: I think I must ask the hon. Member to leave out the Purchase Tax.

Dr. Thomas: I am only trying to meet the argument which might be put against me by the Chancellor of the Exchequer.

The Deputy-Chairman: That is entirely hypothetical.

Dr. Thomas: Surely it is for me to consider the effect of my proposal on the general financial structure, and that is all that I intended, but I leave it at that. I trust that the Chancellor will see his way clear to make some concession to these people. I believe I can safely say I have the support of my colleagues on this bench and many other hon. Members.

Sir J. Anderson: I should like to put the hon. Member out of his misery at once, by assuring him that it would never have occurred to me to employ the argument of possible inflation against the proposal that he has put forward. In talking of inflation, I have always chosen my words carefully. The hon. Member referred to a remark of the Secretary of State for War, but my right hon. Friend did not say that a particular addition to Service allowances would cause inflation. What he said was that the proposal that was put forward was inflationary in character—I think he said "wildly inflationary." It was the argument that was relied on to justify the proposal that was inflationary in character, rather than the amount involved in the proposal itself. However, that is probably out of Order. Let me get speedily into Order by saying that on the Report stage of the Budget Resolutions, when the hon. Member made a plea on behalf of the persons whom he seeks to relieve by this Clause, I said I had a great deal of sympathy with them, and I have. I have a great deal of sympathy with the position of people with small incomes, especially fixed incomes, who have to bear the very heavy burden of Income Tax under present arrangements. But that does not mean that I go all the way with him, in regarding the burden that rests upon these people, as an injustice. There is hardship if you like, but I do not call it an injustice, because all classes of the community have to share in the grievous burdens of the war, and there is a great deal of hardship that we should all like to remove, if possible. But it is not a question of injustice. We have to look at the various classes of taxpayers, and see whether the burden laid upon them is, in all the circumstances, equitable, and see that there is a reasonable proportion of what is admittedly a very heavy and grievous burden.
The hon. Member first draws a very sharp distinction between people with


small incomes, entirely investment incomes, and all other people with small incomes. I think that is a distinction which cannot possibly be sustained. The effect of the Clause—though perhaps the hon. Member does not realise it—would be that a taxpayer with an investment income within the limits with which the Clause deals who had the smallest supplementary income which he earned would be ruled out completely. The Clause is strictly limited to persons wholly dependent on investment incomes. If one is looking at hardship, there are many people with small incomes which are earned. Pensions, for example, are necessarily treated as earned income, and their hardship would be just as great as that of those whose case has moved the hon. Member to such eloquence. Apart from that distinction, what he has in fact done is to go back on the decision taken by Parliament in 1941, when the allowances, which had been £100 for an unmarried and £170 for a married person, were reduced to their present level of £80 and £140 respectively. Three years after it was come to, the hon. Member would give back to that restricted class the allowances that were taken from them in 1941. When those allowances were taken away, they were replaced by the post-war credit—I think completely replaced. I think the effect of what was done then was to give to each taxpayer, in the form of post-war credit, the equivalent of the extra tax that was being levied by reason of the reduction in the level of allowances. There has been no such change in circumstances since 1941—the hon. Member called that a weak argument but it is one to which I adhere very strongly—as to justify us in making the change for which he pleads. I therefore must ask the Committee not to accept his proposal.

Sir Henry Fildes: I would make a plea to the right hon. Gentleman to open his mind. I am not concerned with earned or unearned income. I am concerned with pensioners, and people with small fixed incomes. He has been asked to exercise his generosity and his ingenuity to give relief in these very hard cases, to the extent of less than L5 per head. This is the fifth year of war, and we have all suffered, but the people with small fixed incomes should have

some recognition. I would ask the right hon. Gentleman to look into the matter again and see if it is necessary that this strangulatory taxation upon the poorest of our people should be continued.
If he could loosen that stranglehold a little, so that pensioners and others could breathe a little more freely, financially, it would be a help. I know that right through the Committee there is a feeling that if the Chancellor could see his way to help in this direction it would cause great satisfaction. We are not asking for a great financial contribution. We know that we are hard up as a nation, but we are not so hard up that we cannot help some of these people who, owing to sickness and other causes, are suffering a disastrous experience. If the Chancellor could help he would go down to posterity as the man who, when he had the power, helped the poor, and it would make more easy his entry into the higher sphere.

Question, "That the Clause be read a Second time," put, and negatived.

NEW CLAUSE.—(Exemption from all stamp duties of those dying or slain in the service of His Majesty.)

That the words "any member of His Majesty's armed forces," be substituted for the words "common seamen, marine or soldier," in the Schedule (Part III) to the Act for repealing Stamp Duties on Deeds, Law Proceedings, etc., 55 Geo. III, c. 184.—[Mr. Colegate.]

Brought up, and read the First time.

Mr. Colegate: I beg to move, "That the Clause be read a Second time."
The Chancellor said just now that he had to deal, not with cases of hardship, so much as with cases of injustice and a fair apportionment of the burden as between different members of the community. The case for which I ask his attention is a case not of hardship, but of definite and clear injustice. I want to remind the Committee of the position with regard to Estate Duty on the estates of serving soldiers. As the law stands, all ranks up to and including lance-sergeant are completely and unconditionally exempted from duty if they die in the service of the Crown, and it does not matter to whom their estates are bequeathed. The Act which provides this was passed in the year of Waterloo, 1815. Since then there have been other Acts dealing with


the matter, which can be summarised in this way so far as the higher ranks are concerned. Their estates are exempt for the first £5,000 if they are killed in His Majesty's service. After that, the amount payable is calculated by reference to the deceased's shortening of the expectation of life. There is a further condition that the estate must pass to the widow or near relation of the deceased. That is a provision which, I maintain, is fundamentally unjust. We no longer live in the time when it was assumed that everybody below the rank of an officer was almost penniless and when it was considered unwise and unnecessary to levy anything on the soldier's poor effects which were handed over to his widow. It was also an unusual thing for people leaving £5,000 and upwards to be in the ranks of common seamen, marines or soldiers. Indeed, some people still seem to think that.
This matter was debated in the House on a slightly different basis on the Finance Bill of 1942. The hon. Member for Nelson and Colne (Mr. Silverman) made the surprising statement that the reason why ranks up to lance-sergeant paid no death duties was that they leave nothing on which to pay. That is not the case today. That idea was derived from a period when the common soldier was considered to be a very poor man and the officer was a gentleman and a very rich man. That is no longer true, and I am glad that it is so. One of the advantages of conscription is that it has made us much more democratic in that sense, and people in different positions serve to-day in all ranks and branches of His Majesty's service. As a result of the changed conditions some extraordinary cases arise. There is the case of a man whose estate is normally liable to death duties who serves in the ranks and leaves his estate to anybody he likes. No Estate Duty is charged in that case. If, however, the same man got a promotion in rank above that of lance-sergeant, or obtained a commission a few weeks before his death, all the limiting circumstances would come into operation, and his widow or his mother or that part of the family which inherited his estate might have to pay a relatively heavy fine.
It may be said that there are two ways of remedying the anomaly. We could abolish the exemption from Estate Duty for lower ranks. But will anybody seriously get up at this moment, when we

are fighting on the Continent one of the greatest battles of history, and propose that the House of Commons should abolish the privilege of the common soldier, seaman and marine? Is that what we should tell the relations of those who are fighting overseas? Of course, no one would get up and make that as a serious proposition. The alternative is, surely, the one I am suggesting, namely, that the estates of all ranks serving in His Majesty's Forces should be exempted from duty, when the estates pass to their next-of-kin.

Mr. Bowles: Would the hon. Gentleman agree that that exemption should apply also to Bevin boys, who might be millionaires, who lost their lives in the mines?

Mr. Colegate: I should be out of Order if I referred to that. I am dealing with a specific class of case, and I am prepared to take up that case on another occasion. An argument that is sometimes used against those who feel as I do on this matter, is that the amount involved is very large. I think the amount is not very large, because the highest proportion of casualties is among the younger men, who have probably not yet succeeded to property, or made their fortunes in their businesses or professions. The global amount, which may not be very big, may, however, be very serious to the individuals who are affected by the fines inflicted upon them.
Is it not extraordinary that the relations of a man who loses his life for his country should have this fine inflicted upon them by His Majesty's Government? It is the families who are affected. Estate Duty is a family fine, and upon the families of men who have fallen in His Majesty's Service. The fine is entirely unjust and should be abolished for all ranks. Could there be a less suitable occasion on which to inflict this fine on these families than when their affairs are thrown into disorganisation by the death of the head of the family? Some extraordinary injustices arise. There was a case in which an officer with considerable estate was killed in action a year or two ago. He was not married, and so his historic family estate passed to an uncle. Full Death Duties had to be paid on the highest scale, because the uncle was held not to come within the definition of "near relation." It must seem intolerable to everybody concerned, that the


breaking-up of estates should occur, when the holder of the estate has fallen in the field of honour. Surely that is indefensible.
I ask my right hon. Friend to consider very seriously my plea. I do not want to be sentimental, and I am making the plea on the ground of injustice which we can and should remove. An injustice may affect a very few people but it is none the less felt as an injustice by the whole class concerned. It is not an answer to say that some officers died worth less than £500. That does not matter, because the whole class of officers is singled out for treatment, which does not apply to the junior ranks below lance-sergeant. The loss of revenue would not be great, and the concession would be appropriate at the moment. It would be an indication to the Forces overseas that we sometimes accompany our words of sympathy with deeds. It would be a reassurance to the families of the men upon whom the Estate Duty falls. In one case a widow had to consider giving up her house just after the death of her husband. I could give a good many examples, ranging from the days of Pericles and the magnificent speech which he made in the first year of the Peloponnesian war, to show how the families of people killed in war have been treated. I can assure the Committee that there is hardly a case in history, in which the families of those who died in service to their country, have been fined by the State. The case here is not against hardship, but on the grounds of injustice, and this is the most appropriate time to remedy that injustice. I ask the Chancellor of the Exchequer to give my appeal consideration.

Sir J. Anderson: I agree, on one point, with my hon. Friend who has submitted this new Clause, and it is that in the present state of affairs there is an anomaly, indeed a glaring anomaly. He put the matter, so far as that goes, quite fairly. It is the fact that the common soldier—and that expression must be taken to cover everybody up to the rank of lance-sergeant—has his estate exempt from taxation, if he loses his life on active service. The officer, on the other hand, does not come within the definition of "common soldier," and although he is not treated like the ordinary civilian, his estate is not exempted. I shall have

to remind the Committee of the actual position, because I do not think that my hon. Friend, although he referred to the point, did full justice to the existing provisions of the law.
The provision affecting the common soldier is, as my hon. Friend pointed out, a survival from a very long time back. In the Stamp Act, 1815, provision was made for exemption from Stamp Duty, in respect of probate of will, letters of administration, confirmation of testament, inventory, etc., of the estate of the common soldier. I have no doubt that the view was taken—a view which could have been sustained by argument up to quite recently—that, broadly speaking, the common soldier is not a person possessed of ample means, the levying of Estate Duty on which could be regarded as a matter of any concern to the Exchequer. Where I part company with my hon. Friend is in regard to the dilemma which he sought to present to the Committee. He said there were two courses, one, to remove the exemption which the common soldier enjoys—and who would make such a proposition at this time?—and the other, to extend the exemption to the estate of the officer. The obvious alternative to both, is to leave things alone.
It would not commend itself, on the whole, to the people of this country at the present time, that an exemption which has been allowed to continue up to this point in the war—it might have been removed in different circumstances—should be suddenly, and, so far as the date is concerned, quite arbitrarily swept away. I accept that. I do not, however, agree that the proper course would be to extend the exemption. My hon. Friend put the case, and I mention it merely in passing to dispose of it, of the unfortunate uncle, who had succeeded unexpectedly to the estate of a nephew and found himself in the deplorable position of having to pay a substantial sum in Death Duties. These things had occurred. First, the uncle came into possession of a substantial estate. To single out the one feature of the liability for Estate Duty, and ignore the succession to the estate is not to put the matter in due proportion before this Committee.

Mr. Colegate: The Chancellor has a little misunderstood my point.

Sir J. Anderson: Quite innocently.

Mr. Colegate: I am quite sure of that. From the point of view of the family and the estate, the point is that while the nephew might have died and the uncle would have inherited and paid like everyone else, and no one would have raised the case, in this instance the nephew died quite prematurely because he was on His Majesty's service before he would normally have married and left descendants.

Sir J. Anderson: My hon. Friend has not improved his case by his intervention. I was making the point that the uncle's succession was fortuitous. When my hon. Friend goes on to refer to the prolongation of the life of the unfortunate officer who has died and the possibility of his having children who would have inherited the estate, my remark about the position of the uncle receives added force, because obviously, if 'my hon. Friend is right, the uncle would not have come into the estate at all. But that is by the way. I only mentioned it to dismiss that particular point before coming to the substance of the matter.
The substance of the matter, I would remind the Committee—and, incidentally, this question has twice been fully debated within recent times—is to be found in the Death Duties (Killed in Action) Act, 1914. The effect of that Act, which remains in force, is, as my hon. Friend said, that where an estate does not exceed £5,000 the whole amount is exempt from duty. But where the estate exceeds £5,000, what is the position of the family, because it is the position of the family that we have to consider? It is that the first £5,000 is exempt. In the case where the estate exceeds £5,000, as regards the remainder a rather complicated calculation is embodied in the Statute, the purpose and the effect of which is to render that estate liable to the amount of tax, making allowance for time and interest and so on, that would have been paid had the life of the deceased officer been prolonged to the extent of its normal expectation. Therefore, what the existing law seeks to do is to eliminate, so far as the tax is concerned, any additional charge resulting from the premature death of the officer in the service of his country. That is the position.
If you leave out of account, as I believe you must, the sharp contrast between the position of the common soldier and the

position of the officer, I believe that the treatment which is given under the existing law to the estate of the deceased officer is as fair as it could possibly be made. One last word. It is not possible to treat this matter as if the only cases one had to consider are the cases of the common soldier and the officer. The treatment of all persons who lose their lives as a result of enemy action has been assimilated by recent legislation to that of the officer who loses his life in the service of the country. That position would certainly have to be maintained. Whatever might be done, if the law were changed for the officer, it would certainly have to be changed for all members of the community who may suffer death from enemy action. I suggest that this proposal should not be pressed.

Mr. Turton: I must say I differ from what the Chancellor has said. It is no good merely going back to 1815, which is a long time ago. What is really happening to-day? Let me approach this matter from a rather different standpoint, the position of the actual man in the unit. There are cases, probably known to hon. Members, where certain rich men have remained common privates in the ranks rather than accept promotion. It is a small but definite stimulus against taking promotion. I was not quite so convinced by my hon. Friend's allusion to the uncle. What does strike me is that it is most distasteful to the Chancellor to be collecting money from widows whose husbands have been killed in action. I can think of no more distasteful work for a Chancellor of the Exchequer. I see no reason why any concession given to the man who is killed in action, where he has gone of his own initiative, should be extended to those who by chance are killed through bombing in their homes here.
I hope the Financial Secretary, in the absence of his right hon. Friend, will reconsider this matter, and do so with a warmer heart and a greater appreciation of the situation in the Services. It is a face that at the present time the benefits of the common soldier apply to the Army and Navy but not, in broad practice, to the Royal Air Force, or at least to those engaged in operations in the Royal Air Force; they are usually wearing a higher rank than the appointment of lance sergeant. Most of the members of the Royal Air Force who are engaged in operations are given to the rank of sergeant-pilot.


It does mean that unless this law is altered the Air Force, to whom we are as a nation very grateful, as has been expressed so eloquently by the Prime Minister, do not get the benefit of this 1815 Act. I think there is good ground for extending the 1815 Act so that it will include the higher ranks. I should like to see, anyhow, the junior officer and the non-commissioned officer included in the provisions of the 1815 Act. If the Government do not wish it to apply in the case of relations succeeding to the estate I think they have good grounds for that, but to take Death Duties from the widow or aged mother is, I think, extremely distasteful for the Government. I hope they will reconsider this matter, and try to be more generous in their attitude to the Fighting Services.

Sir Herbert Williams: I am very disappointed with what the Chancellor has said. He has given no reply except, "I will not do it." That is no logical reply. You may get two brothers, one a private soldier, the other a second lieutenant. They both have the same fortune, and they both suffer the same misfortune—they are killed. In one case the duties are paid, and in the other they are not. In the days when this law was framed they had not invented things like O.C.T.U.'s, and so there was a more marked distinction between what was called the officer class and what was called the common soldier. It was possibly assumed that the common soldier would not die leaving anything worth mentioning, so they left him out. He has been left out for 150 years. It is no argument to say that it was not done 129 years ago. The Ten Commandments were made a much longer time ago. There is no basis in intellect or in sympathy for the attitude of the Treasury. They are behaving like the body of hardhearted brutes which the Treasury, collectively, are. We cannot admire them, we cannot love them, we cannot respect them, because they are so unsympathetic.

Colonel Clarke: I also am very disappointed and hope the matter will be reconsidered. The mover of this Clause talked of fundamental unfairness. I want to mention, briefly, two aspects of that unfairness. To-day practically every young man or woman has to go into the Services and through the ranks before

getting a commission. The best of them, who show, by powers of leadership and other tests, that they are worthy of greater responsibility, are given commissions. On being commissioned, they suffer, if they are persons of estate, by coming under a different rate of Estate Duty than before. There is very little reward in that for being more competent and more ready to take responsibility. The second example I want to give relates to non-commissioned officers. A lance-sergeant has to pay nothing—I am taking, of course, cases of N.C.O.'s with estates of more than £5,000, Directly he becomes a sergeant he is liable to the duty. Of course, the transition from lance-sergeant to sergeant is a very simple one; it is just a matter of a short record in Part II Orders, and it is finished. The man gets a few shillings more per week from public funds; but the State, if he dies, takes quite a large sum from his estate. That is very unfair. There are numerous other cases in which this unfairness shows itself, but I do not want to enlarge upon that.
I believe that very few people in the Services know that those below the rank of sergeant, and corresponding ranks in the other Services, are free of duty on their estates if they die or are killed in action. I believe that if it was well-known there would be a great deal more feeling about it than has been expressed. I am afraid I am very ignorant about these things, but until a day or two ago I did not know. I have a feeling that the hundreds of lance-sergeants that I have recommended for promotion ought to have been told that if they were men of substance, as many of them were, they were rendering themselves liable to taxation on their estates; but I could not have told them that, as I did not know. I give them the credit of saying that I think few of them would have turned down the promotion on that account, but I think that they ought to have been told.

Mr. Benson: We ought clearly to understand what this Clause proposes to do. The mover and seconder commended it as a concession to the Fighting Forces. As a matter of fact, it is a concession only to a very tiny section of the Fighting Forces—only those who leave more than £5,000. The more a man leaves, the greater the concession. That is a completely regressive proposal. If the Chancellor has money to spare to give concessions to our


Fighting Forces, and to those men who lose their lives, that concession should be given on a far fairer basis than on the ground that the more a man leaves the greater the concession should be.

Mr. Hutchinson: My hon. Friend the Member for Chesterfield (Mr. Benson) does not appear to have attempted to justify the law with regard to this matter as it stands at present. His argument seems to be that, provided the number of persons who suffer an injustice is not great, it does not matter how much the injustice is. That is not an argument which commends itself to me, or, I venture to think, is likely to commend itself to the Committee. I regret that the Chancellor was not able to see his way to make some concession on this matter, because I feel that this is a subject upon which opinion in the Committee is really out of harmony with opinion of the public as a whole. If you went to 99 people out of no, I believe that they would say that they thought it more fair that, when a man lost his life in the service of his country, his estate, whatever size it may be, should be free of Estate Duty.
I want to add only one further observation. I was unable to follow my right hon. Friend when he said that there was no injustice. The law on this matter is really out of date. It starts with the Act of 1815, and then, for certain classes of persons, there is the Act of 1914. If the basis of exemption had been the size of the estate, and not the rank of the deceased person, I could have understood it, though I could not have agreed with it. But that is not the case. The test is not the size of the estate, but the rank of the person to whom it belongs; and that seems to me, as my hon. Friend the Member for South Croydon (Sir H. Williams) pointed out, altogether indefensible from any logical standpoint. The sense of the Committee really is with my hon. Friend, and I hope that, before the Report stage, this matter may be reconsidered, and the law brought more into line with what I believe to be the feeling of the country.

Mr. Keeling: The Chancellor did not suggest that there was any reason for preserving this anomaly except that the officer was being fairly treated. If that is so, is it not an inevitable conclusion that the private is being more than

fairly treated, at the expense of the general taxpayer? That being the case, why does not the Chancellor repeal the 1815 Act? The obvious and only reason is that he has not got the courage to do so, because if he repealed that Act there would be a storm of protest. I suggest that the Chancellor ought to have a better reason for preserving this anomaly than timidity. I ask the Financial Secretary to look into this matter again before the Report stage.

Mr. Assheton: I was not here during the whole of the Chancellor's speech, but I am quite certain that if I had been, I should have heard him say that the logical remedy for this anomaly—I know he regards it as an anomaly—would be to repeal the exemption of the common soldier. I think he holds the view that a soldier who is not a common soldier is not unfairly treated, but that the common soldier has favourable treatment and a great advantage. The hon. Member for Twickenham (Mr. Keeling) suggested that the Chancellor has not the courage to repeal the Act, and I very much resent that suggestion.

Sir H. Williams: What is the reason, anyway?

Mr. Assheton: That is not the sort of suggestion that can be made against this Chancellor of the Exchequer, whatever else may be said. I suggest that the real reason is a very obvious one—that it is, at this stage of the war, quite out of the question to alter the law—[HON. MEMBERS; "Why?"] Because the war has been going on for over four years, and a very large number of people have been killed, and it would be quite wrong to alter it at this time. If it should be altered in the future, it ought not to be done in time of war. I do not think there is any reason for the alteration to be made now.

Sir H. Williams. If that is an argument, we should never change anything.: Sir H. Williams. If that is an argument, we should never change anything.

Captain Cobb: The Minister has spoken about the exemptions which the common soldier gets. May I remind him that the common soldier in the Home Guard gets no exemptions, and, whereas for duty purposes, the private soldier in the Home Guard has no exemption at all, an officer in that Home Guard gets the travelling expenses of a common soldier? It does seem to me that, when the


personnel of the Home Guard lose their lives, as a result of their service, they ought to be treated as private soldiers.

Mr. Assheton: The question regarding a member of the Home Guard killed on duty as a member of the Home Guard is one which is, at the moment, being decided elsewhere, and the decision has not yet been announced.

Sir H. Williams: The fact that this is being decided elsewhere, does not deprive the House of any of its legislative power. We can alter the Rules while we are sitting.

Sir R. Tasker: I suggest that the appropriate procedure is to alter the rules and give the exemption to all ranks below commissions in the Royal Navy, Army, Royal Air Force and the Mercantile Marine. These latter splendid men enjoy no ecstasy of idling. Let the commissioned officer enjoy the rights he now enjoys, or which his widow will enjoy. There are many anomalies. I had two sons. One was a field officer who, a few months ago, gave his life, and £5,000 has been allowed. My second son is really a private in the Army, but has been lent to another unit as a pilot officer. I do not know how he would be dealt with. I have no doubt how my widow and family would have been treated, had I been killed as a member of the Home Guard, until a few months ago. My family would have had to pay, because I was a private in the Home Guard. If I had been a commissioned officer in the Home Guard, they would have had the privilege of the £5,000 exemption. Surely, there should be no distinction between men who have joined the Air Force, and men in the Army. To make an adjustment, if exemption cannot be granted to all men serving, I would suggest that at least all men, non-commissioned officers and warrant officers, should be exempt, thus including these very gallant men who are serving in the Royal Air Force and Mercantile Marine.

Mr. Bowles: Surely, the mover and supporters of this new Clause, who are prepared to allow this exemption to apply to slightly higher ranks, and who, later on, will say it should be extended to second lieutenants and up to captains, must be resisted, because in due course they will come along and say, "Why do

you perpetuate this anomaly?" In 1815, there was hardly anything in the nature of what hon. Members would refer to as Death Duties at all. In those days also, the distinction between the common seaman and the common soldier, and the officer class, was a very much greater distinction than exists at the present time. But, surely, the Committee ought to bear in mind that the real thing to do—I think it was a justifiable excuse put by the Chancellor that the war having gone on for 4½ years makes it difficult to do, and that it should have been done before the war started—is to remove this exemption altogether.
In this total war, men and women are liable to be directed, even if they do not want to go, into industry. Men and boys in my constituency, and in others, were very anxious to join the Forces, but the Minister of Labour thought that they should go down the mines, or be directed into other industries, or retained in the industries, in which they were engaged when war broke out. They are liable to be killed, and are killed. I remember seeing, a few weeks ago, a newspaper report of the first "Bevin boy" being killed. I do not see any reason why boys in that position should not have the same treatment as anybody else serving in the Armed Forces, or in the war as a whole. I feel that the Chancellor of the Exchequer is on perfectly sound ground in refusing, first of all, to withdraw this anomaly, in view of the fact that the delay on the part of his predecessor in doing so makes it awkward for him, and, secondly, because there is no justification at all for the continuation of this exemption.
The point, to my mind, is this. One hon. Member said that 99 people out of 100 would be very resentful if they heard of the existence of the present state of the law, but 99 people out of 100 leave no property at all. Therefore, this only touches a very few people. A large number of people who are wealthy enough to have more than £5,000 are likely to find themselves officers by this time. Others who have not that money also may be officers, but a large number of people in the ranks in all the Services are likely to leave very little, particularly in view of the fact that they are so badly paid. The Treasury are right in the stand that they have taken, and objection only comes


from people who do not like Estate Duty at all. An hon. Member referred to Estate Duty as fining the family. It may be a phrase used earlier in this Debate, or other Finance Bill Debates, but it is an old-fashioned conception of Estate Duty. It is purely and simply that it is the wish of the State that not more than a certain amount should be inherited by certain people from deceased persons. People who believe that their privilege must be carried on by inheritance, naturally dislike any form of inheritance tax. That is why they, and they alone, are trying to make further holes into the Estate Duty at the present time by extending the exemptions.

Sir P. Hannon: I have sat through the whole of this Debate and I think it will be agreed that the sentiment of the Committee is entirely in support of the Clause which has been moved by my hon. Friend the Member for The Wrekin (Mr. Cole-gate). The Financial Secretary, although he was not here during the speech of his right hon. Friend the Chancellor of the Exchequer, should take cognisance of the views which have been given since he came into the Committee. The views expressed by Members must be carefully considered and weighed by His Majesty's Administration. With one or two exceptions—the sort of argument raised by the hon. Member for Nuneaton (Mr. Bowles), who would destroy all inheritance rights and privileges—the sentiment of the Committee is on the side of the Clause. It is pitiable that we should continue to move in the atmosphere of George III in this Committee. George III was a very excellent monarch, during a period of his reign, but I would not say that his faculties in 1815 were equal to sound legislation. The case made out seems to me to be unchallengeable. Take the case of my hon. Friend the Member for South Croydon (Sir H. Williams) of two brothers, one a non-commissioned officer who, because he is a lance-sergeant, is freed from Stamp Duty on his inheritance, and the other who because he takes a commission is deprived of that privilege. This is a case in which more has been said in Committee, and the Financial Secretary cannot disregard the views to which expression has been given and I hope that he will reconsider the matter.

Mr. Colegate: I can only say that I and my hon. Friends are extremely dis-

appointed at the reply we have received. I am not going to discuss Bevin boys or the injustices of other classes. I laid before the Committee a clear and obvious case of gross injustice. My right hon. Friend the Financial Secretary to the Treasury gave me one answer. His main answer was that he could not do it at this stage of the war. Why not? Is the fact that we are in the middle of a war an argument for not remedying an injustice? We did it yesterday. There was an injustice to parsons which we removed yesterday. No one said, "You cannot remedy injustice to people who are not getting sufficient allowances on their houses because we are in the middle of a war." Why, surely, at the very time when people are fighting overseas this is not the time to say that injustice cannot be removed. We can remove injustice on a rectory, on this, that, or the other, but to those fighting overseas we say, "We cannot remove the injustice on your family." That is a nonsensical argument Really I cannot accept it, and I cannot withdraw the Clause.

Question, "That the Clause be read a Second time," put, and negatived.

NEW CLAUSE.—(Turnover standards.)

Any person who shall, in any chargeable accounting period beginning at or after the end of March, nineteen hundred and forty-four, be assessed for that period to excess profits tax shall, notwithstanding any provision in Section thirteen of the Finance (No. 2) Act, 1939, or any amendment of that Section, be entitled to substitute seven per cent. on his sales turnover for that period as his standard for such chargeable accounting period.—[Mr. Higgs.]

Brought up, and read the First time.

Mr. Higgs: I beg to move, "That the Clause be read a Second time."
This new Clause is on the Order Paper in the name of the hon. Member for Duddeston (Sir Oliver Simmonds), myself, and more than 70 other Members. The hon. Member for Duddeston is away on important war service and I move it in his place. The Chancellor in his Budget speech was sympathetic to industrial reconstruction. I could refer to many sentences. The Committee is very familiar with his attitude as to the necessity for the reconstruction of industry after the war.
One thing that is absolutely necessary is a cash reserve. We are very familiar with


the present position of E.P.T., and hon. Members will agree that that tax in some form or other is essential and that the limitation of profits is necessary owing to the absence of normal competition. But the position of E.P.T. at the present moment is exceedingly unsatisfactory for a large number of medium-sized industries. The Chancellor, in this Bill, has granted a concession of a very valuable character to small industries, and large established firms with pre-war standards are also in a satisfactory position, but this Clause has been drawn up with the object of assisting the medium-sized firms in particular. Hon. Members will agree that all firms are entitled to a financial reward for services rendered. I know some will say that if this Clause is accepted large firms will benefit, and I agree that certain firms would benefit if they had a large turn-over. But that is begging the point. A few firms may get an additional profit to which they are not entitled, but an injustice would be corrected for the medium-sized firms which I have in mind. E.P.T., for a number of these undertakings, is inequitable and it becomes more so as time passes by.
When E.P.T. was enacted four years ago it was not anticipated that the war would last so long. We have now had nearly five years of war, and industry, over such a period, changes considerably. Whatever the outlook might have been when E.P.T. was introduced conditions in industry are very different to-day. I would like to cite one case which came to my notice in my constituency. It concerns a jewellery firm which had an excellent tool room, and which changed over to munitions, particularly gauge making. That firm had no pre-war standard. In the same building there was a firm of wireless accessories manufacturers, which also had a good tool room and also changed over to gauge work. This firm had a good pre-war standard but the jewellery firm, which had been in existtence for 50 or 60 years, had practically no pre-war standard. These two firms were serving the community and one was benefiting itself while the other was not. I do not think Parliament ever intended that certain companies should be virtually pauperised through the war effort.
I would like to read three paragraphs from a letter I have received, because

they clearly point out the injustice of E.P.T. as it stands at the present time. This is from a firm of general engineers:
You will see in this case the percentage of profit on turnover is three-quarters of one per cent. and this is on high precision work. We are working down to 'half a thou' on our main products. The company will not benefit by the extra £1,000 in the Finance Bill as it is a subsidiary of an investment trust. The factory was taken over from the former owners at half price because of the proved ability of the writer, who was to introduce new business. Because of this fact, therefore, the percentage standard becomes half what it otherwise would have been. In other words we suffer year after year through under capitalisation
Every firm that is under capitalised suffers in the same manner. Those are three important points of which I should like the Financial Secretary to take note. We may be told that the idea is settled and cannot be altered. That idea has been exploded on the last Clause. Concessions have already been granted. As time passes, conditions alter, war or no war, and I hope the Chancellor will give some sort of consideration to the case on its merits. It does not radically interfere with E.P.T. Also, the wording is not binding. The principle is there. The 7 per cent. is an arbitrary figure. I am not asking for 7 per cent. I am asking the right hon. Gentleman to draft a Clause something on the same lines. He knows the suitable percentage better than I do. I ask for this percentage to be alternative to E.P.T. I consider it important that the amount left after payment of E.P.T. should grow with the turnover. We may also be told that it will mean a loss of revenue. I agree that the State has to have revenue but I wonder whether it would really mean a loss. All manufacturers have had the experience of turning over a shop or factory from day work to piece work. They have realised that it would increase their wages bill by 30 or 50 per cent., and have experienced a greater output relative to wages. The output grows much more quickly than the cost of the labour. One section of the community should have as much incentive to production as another. We have heard much during the last few weeks about the necessity for ploughing back but there are a large number of firms which have nothing to plough back.
I again emphasise that I am not suggesting this new Clause as an alterna-


tive to E.P.T. It does not affect the structure of E.P.T. I would go so far as to say that if the Government could see their way clear to grant this concession they would limit the dividends of shareholders. We are not asking for it in order that greater profits can be distributed; we are asking for it solely to give industry greater stability after the war. The Chancellor in his speech made a point of the 10 per cent. of the 100 per cent. E.P.T. that will be returned to industry after the war, and he said the amount accumulating was something like £40,000,000 to £50,000,000 per annum.
I would like to cite a case. Suppose a firm with a capital of £100,000; it is reasonable to say that it turns over its capital once a year. Before the war it would be reasonable to say that the profit, at 10 per cent., was £10,000. In present circumstances we all agree that profits are more easily made. That firm, therefore, now makes £20,000, or 20 per cent. There is, therefore, an excess of £10,000 to be paid in E.P.T. There will be returned £1,000 per annum, or £5,000 over the five years. What is £5,000 to a firm with a capital of £100,000 for replacing its plant, putting its buildings in decent condition, replacing its tools and jigs, and changing over, when the prices of machinery are increased by 50 to 75 per cent. and the buildings by 100. per cent.? The Chancellor was misleading when he said that the net gain to industry would be considerable. I hope that the right hon. Gentleman will see his way to bring something in on the lines of the Clause in question. I am appealing on behalf of medium-sized firms with a poor pre-war standard. We want an agreement on the Chancellor's part that the standard of any company shall not fall so low as to constitute an injustice. We merely ask for a reasonable minimum below which the standard should not fall.

Sir P. Hannon: I support the Second Reading of the Clause. The Clause has many implications and must be taken in relation to the whole reconstruction policy of the Government hereafter. All the manufacturers referred to by my hon. Friend in his clear statement are naturally anxious as to the process by which they shall be restored to industrial activity when the war is over. In order to do that they must have some substantial financial reserves available. This sugges-

tion, that a certain percentage of the turnover of the business should be appropriated for the purpose of reconstruction of the business after the war, is a reasonable one. As my hon. Friend has said, it is for the Treasury to consider the reasonable percentage which should be arrived at in relation to the turnover of the business.
Many firms in the Midlands would appreciate a concession of this kind. Many big, medium and small manufacturers are anxious to know how they are to get orders and to continue the facilities for the employment of their people when the war is concluded. I beg the Financial Secretary to realise that the Treasury can help in this matter without any sacrifice of revenue. In the Debate which will take place next week in connection with the White Paper, matters of this kind will be threshed out, but meanwhile a concession such as is suggested in the proposed new Clause would give encouragement to small manufacturers to believe that they had some hope of receiving the sympathy of the Treasury in the industrial conversion to peace production which will take place in the near future. I hope that my hon. Friend will recognise not merely the propriety but the necessity for an improvement of this kind, and that many hon. Members on the opposite side, who are particularly concerned with continuity of employment, will sympathise with our plea. I can assure the Committee that a concession on the lines proposed, either of 7 per cent. or some smaller percentage, would raise some of the small manufacturers from a position of making only a fractional profit to making something reasonable, out of which they could create a reserve, and that it would be warmly received by a large section of the community.

Sir Stanley Reed: I appeal to the Financial Secretary to the Treasury to give very careful consideration to the principle of the new Clause. He can do so without affecting the general structure of the Excess Profits Tax, otherwise we should not be supporters of the proposal. Within that structure I am certain that the Chancellor can make any adjustment which may be proved to be desirable in the interests of the rapid rehabilitation of our industrial power. Material alterations have been made which will affect the great and the small industries, but it is


the middle stratum which is out of benefit to a large extent, although it is upon that stratum that we shall largely have to depend for rapid rehabilitation of our industrial power and our export trade.
This position is not confined to the Midlands but exists in every industrial centre in Great Britain, and mostly where there is a diversified industry with a large number of small manufacturers. This concession will have an intimate bearing upon our export trade. I have some experience of the export trade both as an exporter and as overseas buyer, and I know that it is a constant source of pre-occupation and anxiety to me. I wish I could dismiss it as lightly as do some hon. Members who never made a thing or sold a thing in their lives, and that I could be so optimistic about the future of our export trade. I am convinced that we have by every means in our power to rehabilitate rapidly our industrial capacity for export, or we shall be grievously left in the post-war years. I will not go beyond that. I will not ask the Financial Secretary to commit himself to a figure, but I do ask him to keep the principle of this new Clause actively before his mind, and either between now and the Report stage, or between now and the next Budget, to do his utmost to see that this is embodied in our financial mechanism, not for the benefit of the manufacturer, not for the benefit of the shareholder, but for the benefit of the whole industrial community and the export trade, on which our only hope of maintaining our standard of life must rest, and which is of such paramount importance.

Major C. S. Taylor: I would like to say a few words on the idea behind this Clause. Where there are two companies, one, say, manufacturing cameras before the war, and the other manufacturing watches, and both are turned over to war-time production, perhaps making the same instruments of war, it seems unfair that one, having a good standard before the war, should be entitled to a fair remuneration for the work they do, whereas the other company, say the one making watches, have no reward whatever for their labours. I would join with my hon. Friends in asking the Financial Secretary to consider, at any rate, the idea behind the Clause, and before the Report stage, perhaps

introduce some Clause or wording which would give a little equality between two concerns in the circumstances I have mentioned.

Mr. Assheton: I do not think any Member of this Committee can doubt the intention of the Chancellor of the Exchequer to do what he can to rehabilitate industry in this country after the war. He has given this Committee every evidence of his intention in that direction, and I know that my hon. Friend the Member for West Birmingham (Mr. Higgs) would be the first to recognise that. So will other hon. Gentlemen who have spoken on this subject. The Committee will remember that the object of the Excess Profits Tax was to take the profit out of war. I know very well the inequalities which that tax has imposed upon the commercial community of this country. I know very well how harshly it has operated in many cases—in some cases almost disastrously harshly. I am well aware that any tax which takes 100 per cent. of profits must be essentially bad. We all understand that we have accepted it during this war for a bigger and wider reason: because it was necessary to obtain national unity in this country. That is why we have accepted it, not because we think it is a good tax from the fiscal point of view; no one thinks it is. Having accepted that, what has the Chancellor done this year? He has made certain concessions to the small man, and the House and Committee have accepted them. I think they were reasonable. I think the Committee really thought that was the best way to meet some of the worst difficulties that have presented themselves.
The proposal put forward here is a proposal which runs counter to the fundamental principle which underlies the Excess Profits Tax. That is the determination of excess profits by comparing the present profit with the prewar profit. This proposal has nothing to do with that. Let us look at the effects which such a proposal would have. Perhaps I could give my hon. Friend the Member for West Birmingham a few figures, and then he will see where his proposal would take us. I have the figures, for example, of a number of aircraft concerns. In this particular set of concerns the aggregate standard is £2,220,000. The aggregate turnover is


£96,400,000. So seven per cent. of the turnover would be £6,749,000, which would be an increase of the standard by over £4,500,000.

Mr. Higgs: I said that 7 per cent. was an arbitrary figure, and that the figure might be 3 per cent. or 4 per cent.; but my right hon. Friend has taken the figure of 7 per cent., as though that were the only figure.

Mr. Assheton: I quite understand the hon. Member's point; but if we lowered the 7 per cent. too much, he might find that he did not like it. I was going to take, next, a dozen engineering concerns. The aggregate standard there is £4,800,000. Seven per cent. of the turnover is £9,630,000. So I could go on. It is quite dear that proposals of this kind would have the effect of increasing the standard.

Sir P. Hannon: Are those examples quite fair? We are concerned with the smaller and medium manufacturers, not with these great concerns, which have a turnover of £90,000,000.

Mr. Assheton: I do not think that my hon. Friend's criticism is at all apposite. This is just a set of statistics, which has been compiled from actual cases. I am only trying to show my hon. Friends the effect which their Clause would have. I agree that, if the 7 per cent. were reduced, it would have a different result. But the Committee should know what the proposal means. Let us look at it solely from the taxation angle. The primary objection to this Clause from that angle is that it does not provide a proper standard at all. The only basis for an alternative standard, I think, is the capital employed. But in any case turnover is a factor which varies according to the circumstances of each industry. One industry may turn over its capital several times each year; but let us look at the shipbuilding industry, for example, in which the period of turnover might exceed a whole year. I cannot see that a tax based on the turnover is one that we could recommend to the Committee. I believe that the Committee realise well that the real objection to the Excess Profits Tax is that it is 100 per cent. Nothing except reducing the 100 per cent. would get over the objections which my hon. Friends have pointed out. I think I have made it clear that the method set out here of a

turnover tax would not have the effect which my hon. Friends would like to see. In view of that I must reject the Clause on behalf of the Government, but I do not want any Member to think that the Government, and the Chancellor in particular, are not fully aware of the serious hardships which the Excess Profits Tax imposes on many people in industry.

Sir Arnold Gridley: I apologise for intervening, because I have not been able to listen to the discussion on this Clause, having been engaged on important business upstairs until five minutes ago. I want to say a word on this new Clause, because of its effect on a very large number of the smaller industries. I am not attempting here to deal with the large industries, such as the Financial Secretary has referred to, but I have in my hand a telegram from the Engineering Industries Association, which says:
Hundreds of our members with low E.P.T. standards will be compelled to close down on the termination of the war, creating unemployment, unless some Amendment to the Finance Bill, as proposed by Sir Oliver Simmonds, is given effect. Seed money must be left in the business, if it is to survive.
This Association covers thousands of the smaller industries. I am not in any way connected with it, and, therefore, I am speaking quite impartially, but the result of the taxation standards at present is that there are many firms, whose output has increased ten times since the war broke out, who are left with profits less than half what they earned in the standard year. Their position, at the end of the war, with the heavy E.P.T. liability which they have to face, will land many of them in a position approaching complete bankruptcy.
We have had, in this present Budget, very useful help to industries which the Chancellor has so wisely introduced. We shall be discussing next week the Government's Command Paper on Employment, and, if we are to be asked to help, as we are anxious to do, in an expansionist policy after the war in order to provide the maximum employment, it is most important that those who have to deal with the Budget proposals and their effect on industry, should be prepared to keep an open mind on the adverse effect of the present crushing burden of taxation on the smaller industries. Just before the war they may have faced a period of depres-


sion or development, but they have developed since and are performing work of the greatest importance to the nation. There are hundreds of these hard cases that really deserve much more consideration than they have so far been given.

Sir F. Sanderson: May I ask my hon. Friend one question? Does he not agree that a very considerable number of the firms to which he makes reference commenced during the war?

Sir A. Gridley: No, of these firms for whom I am speaking they are, I understand, a very small proportion of the total. I do not think that we hoped for much success with this Clause to-day, but it is of the first importance that this serious position should be ventilated, and it can be safeguarded. There are no firms in this association, so far as I know, that have any desire to be allowed to retain large profits which they can distribute. What they want to be clear about is that their cash position will be such that, at the end of the war, they will be in a position to carry on through the difficult transition from a war to a peace position, and I do not think there would be any objection if the Treasury introduced a safeguard which prohibited them from paying more that a very modest dividend. The Clause could also limit the volume of the turnover to which it applied, which would take care of the smaller undertakings and leave the larger ones untouched. Therefore, I have only risen to point out these matters to the Treasury. They will have, if the situation is left as it is, a most adverse effect upon unemployment after the war, which all of us in this Committee are most anxious to do our utmost to avoid.

Sir George Schuster: I had not meant to intervene in this Debate, because I did not see my way to support the particular Clause which has been proposed. I see great difficulties in its particular form, but my right hon. Friend the Financial Secretary said something which has brought me to my feet. He said that the real objection to Excess Profits Tax is the 100 per cent. I put it to him that the real objection is the injustice with which the standard is calculated. At least, that is my experience. I want to put this point to him. He has told us how anxious the Chancellor

of the Exchequer is to see that industry gets a chance of continuing after the war. Many of us receive hard cases caused by Excess Profits Tax, which are within our own experience and within our own businesses, but none of us has a chance of ascertaining how far the condition revealed in particular cases really affects the position of the country as a whole.
The point that is worrying me is that raised by my hon. Friend the Member for Stockport (Sir A. Gridley). What will be the financial position of the great part of our manufacturing businesses after the war to face the terminal charges and the charges for converting back from war to peace? I want to ask the Financial Secretary: Would the Treasury consider making use of all the information which is available to them, through their Inland Revenue returns, to make a sort of sampling inquiry, so that we can have presented to us a clear picture of what is the position? You can take your sample in any way that you like, but sample inquiries are capable of producing a fairly true picture. It would be of great value to the Committee to know just how much general truth there is in this fear which oppresses some of us, that the present system of taxation is completely undermining the financial structure of British industry. I want to know whether that fear is justified. I do not want to exaggerate it, but if there is any truth in it, it is really a very serious matter.

Question, "That the Clause be read a Second time," put, and negatived.

NEW CLAUSE.—(Appointment of collectors.)

Subsection (5) of section thirty-seven of the Finance Act, 1931, is hereby repealed and the following subsection shall be substituted therefore:
(2) This section shall not apply to collectors in and for Scotland and Northern Ireland or to the appointment of collectors by, or to collectors appointed by, and commissioners acting under section sixty-nine of the Income Tax Act, 1918."—[Mr. Benson.]

Brought up, and read the First time.

Mr. Benson: I beg to move, "That the Clause be read a Second time."
The initiative for this Clause dealing with the appointment of collectors for the City of London comes from the collectors themselves, and I and the hon. Member for the City of London (Sir G.


Broadbridge) promised that we would raise the matter. The position is -that all Income Tax collectors, save a small group in the City of London, are appointed by the Board of Inland Revenue. That appointment was made in the Act of 1931, and when the change was made the Clerk to the Commissioners of the City of London started an agitation and got the support of the collectors themselves to contract out of the change. The result was that when the Act was passed the City of London was excluded.
Collectors appointed by the Board of Inland Revenue are pensionable officers; collectors appointed by the local Commissioners in the City of London are not pensionable officers. In order to get the support of his collectors the Clerk to the Commissioners practically guaranteed them permanent possession of their offices. The result is that these collectors are getting older and older, and it was not until the Board of Inland Revenue put its foot down and refused to confirm their re-appointments that younger collectors were appointed. Last year the Board refused to appoint four of the old collectors—one was 67, another 73, one 83 and another 86. This year they refused to appoint three—one was 76, one 82, and the other 85. It is a very healthy thing to be a collector in the City of London. The point is that so long as the City of London collectors are appointed by the Commissioners on a non-pensionable basis they must give some concession in the way of allowing them to give longer service.
Throughout the length and breadth of the country collectors appointed by the Board of Inland Revenue have to retire at the age of 60 on pension, but collectors appointed in the City of London retire at the age of 70 unpensioned. There are two objections to that. First, from the point of view of that tax machinery, we get old people to do the job. Secondly, from the point of view of the collector himself, he can never become pensionable. It is not for the purpose of getting pensions for the people already appointed but to remedy this bad system of having what are, in effect, State servants unpensioned, that the London collectors have asked us to introduce a Clause transferring the appointment of the City of London collectors from the Local Commissioners to the Board of Inland

Revenue. I think on human grounds this anomaly must sooner or later be ended. I think we can argue very strongly that the sooner it is ended the better, and there is no earlier time than the present.
One other point. So long as the collectors in the City of London are appointed by the Commissioners and not by the Board of Inland Revenue, the tax collection of London is a small enclave of the whole of the country. For instance, if a taxpayer in arrears moves out of the City of London into the country, then the collectors of the City of London cannot follow that taxpayer for the purpose of tax collection. They have to report the matter to the Board of Inland Revenue, and the Board has to report the matter back to wherever the taxpayer has moved. Similarly, if a country taxpayer moves into the City of London, he cannot be followed by the non-City of London tax collector; the matter has to be reported. It is very clumsy machinery to have this wire-netting cage round the City of London which prevents either the City of London tax collector following a man outside, or vice versa. Both from the point of view of the tax collectors themselves, who now wish to come on —at any rate so far as new appointments are concerned—to the normal basis throughout the rest of the country, when they can become pensionable officers of the Board of Inland Revenue, and for the more efficient management of the tax collection of this country, I suggest that it is time for the Chancellor of the Exchequer to accept this Clause.

Sir George Broadbridge: I desire to support this Clause moved by the hon. Member for Chesterfield (Mr. Benson). There is little I can add to what he has said, for he has dealt very fully with it. It is quite true that these City collectors asked to be excluded from the Finance Bill in 1931 but they have evidently found that, in asking to be so excluded, they made a mistake. I know this class of tax collector in the City. I frequently come into contact with them, and I am perfectly certain that they are not desirous of blowing hot and cold, and having regard to the fact that the City of London is the largest tax-collecting area in this country, it behoves us to see that the tax collectors are serving under the very best conditions. With those few words I commend this Clause to the Committee for their acceptance.

Mr. Assheton: If the hour was not so late I could give the Committee a lot of interesting history about the collection of tax inside the City of London, but I think I had better confine myself briefly to the points which have been raised. As the hon. Member for Chesterfield (Mr. Benson) knows, collection from the City was a considered decision taken by the late Lord Snowden who was Chancellor at that time, and whose view was shared by the hon. Member. Subsequently, the hon. Member somewhat modified his views and I think that in 1936 he started moving in another direction. I do not want to ask the Committee to accept this Clause, but the policy of the Board of Inland Revenue at the moment is to await an approach from the Commissioners of the Division of the City of London. I understand that at the present time there is still a division of opinion among the staff concerned as to the desirability of of the City collections being centralized under the direction of the Commissioners of Inland Revenue, but we will await an approach from the Commissioners and it is quite possible that before we have another Finance Bill it may be that some change may be made.

Mr. Benson: In view of what the Financial Secretary has said I beg leave to withdraw the Motion. I suggest that in addition he should not await an approach from the Commissioners only but should also be prepared to consider an approach from the collectors.

Motion and Clause, by leave, withdrawn.

The Deputy-Chairman: Mr. Brooke.

Sir F. Sanderson: On a point of Order. Do you propose, Mr. Williams, to call the new Clause standing in my name dealing with "Deduction for cost of artificial limbs"?

The Deputy-Chairman: No, it has not been selected.

Sir F. Sanderson: May I ask for your guidance, Mr. Williams? When I drew up this Clause and handed it in to the Table in the form of a Question I was told that it could not be put in the form of a Question but must be put in the form of a new Clause to the Finance Bill. Could you inform me in what way I could make my desire known to the Chancellor?

The Deputy-Chairman: No, not at the moment.

NEW CLAUSE.—(Relief from double taxation).

Section twenty-seven of the Finance Act, 1920 (which relates to relief in respect of Dominion income tax), shall be amended as follows:

(1) For the word "Dominion," wherever it occurs, there shall be substituted the words "oversea territory."
(2) In paragraphs (a) and (b) of Subsection (1) the words "one-half of," shall be omitted;
(3) Paragraph (b) of Sub-section (4) shall be omitted;
(4) For paragraph (a) of Sub-section (8) there shall be substittuted the following paragraph:

(a) The expression "oversea territory" means any territory outside the United Kingdom of Great Britain and Northern Ireland."—[Mr. Brooke.]

Brought up, and read the First time.

Mr. Henry Brooke: I beg to move, "That the Clause be read a Second time."
Let me make it clear at the outset that my hon. Friends and I do not wish to ask the Government for a detailed reply covering the whole field of double taxation now. Rather we wish to urge, through this Clause, the need for the Chancellor to make full inquiry with a view to a comprehensive reform of the existing law. I do not know whether the Committee appreciates the present situation. With respect to overseas earnings, if the local rate of taxation in the country concerned is 40 per cent., that immediately reduces earnings of £1 to 12S. The British rate of tax is 10s. in the £, and when this is applied to the remaining 12s. it reduces it to 6s. So the recipient has from his £1 not 10s. left, as he would have if it were domestic earnings, but only 6s. That is a very severe handicap against anybody who is assisting the nation by carrying on overseas business. The Chancellor himself has been foremost in showing that he appreciates the paramount necessity for all citizens in the country and for the Government itself to work together in the stimulation of British overseas trade. The present aggregate of taxation, when domestic taxation is added to foreign taxation, is so crushing that a business man, or it may equally be an author who is having books published abroad, wonders if it is any use going on. If he has a business he may be compelled


to sell it to some native of the overseas country, who will not be subject to this severe burden.
I am sure that the Chancellor of the Exchequer, from what he has said, agrees that the existing law, which dates from the 1920 Finance Act, needs overhaul. It has become inconsistent with Government policy for the furtherance of overseas trade. Three salient changes have taken place since 1920. First of all, there has been a sharp rise in the rate of taxation, not only in this country but in practically every country overseas. Secondly, the theory of the present law is that the British Government should work towards reciprocal agreements with other countries overseas; but unhappily our experience of these 24 years is that reciprocal agreements are very hard to come by. Thirdly, the 1920 Act is based on the old theory, I sincerely hope now an obsolete theory, that the Government would be ill advised to encourage British citizens to engage in overseas business unless the yield on the capital employed is likely to be so high that it can well afford to bear double taxation.
The 1920 Act indicates too limited an approach to the problem. My fear, from something that the Chancellor has said, is that he is still thinking only along the restricted lines of reciprocal agreements. If we are to wait until we have reached reciprocal agreements with the Dominions and all the foreign countries concerned, we shall have to wait till the cows come home. The situation of Britain does not allow for that. That is why I have put down this simple Clause—far too simple, if one was really undertaking the reform of double taxation. It provides, first, that the measure of relief from double taxation, which at present only applies within the British Empire, shall apply to earnings received from foreign countries as well as from Empire countries; and, secondly, that the relief, which is now limited to one-half of the Dominion rate of taxation, shall be freed from that limitation. In other words, the earnings will pay tax either at the British rate or at the overseas rate, whichever is the higher, but not both. I hope I have proved the case for a thorough investigation and a radical overhaul of the existing law.

Mr. Assheton: My hon. Friend told the Committee that he was really moving the

Clause in order to ventilate his views on the matter, and I think it is very appropriate that the subject should be discussed in this Committee. It will be within the recollection of the Committee that my right hon. Friend the Chancellor said how he fully realised the great importance of this matter when dealing with it in his Budget speech. The only thing I can say now is that everything that has been said by my hon. Friend or may be said by others will be carefully noted, and that at the present time, in view of the negotiations that are going on I should not care to make any further statement on behalf of the Government. If an arrangement comes to be made with the United States which is on different lines from the existing arrangements with the Dominions, it will clearly become necessary to consider what the repercussions on the latter arrangements may be. But it would be a mistake to prejudice the issue by making any alterations in the law at the present time. In view of that, I have no doubt that my hon. Friend will be good enough to withdraw the Clause.

Mr. E. P. Smith: With regard to the negotiations that are taking place between the United States and the British Treasury, can we be assured that they are proceeding satisfactorily?

Mr. Assheton: I have no reason to think anything to the contrary.

Mr. Brooke: On my right hon. Friend's assurance that the Chancellor will give this matter his attention and will look at it in a broad and not a narrow way, I am happy to ask leave to withdraw the Motion.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(Rate of succession and legacy duty payable in certain cases of illegitimate children.)

(1) Where—

(a) an illegitimate child or the spouse or issue of an illegitimate child takes any interest in real or personal property under the intestacy of the mother of the child or under a disposition made by her;
(b) the mother of an illegitimate child takes an interest in real or personal property under his intestacy or under a disposition made by him or his issue.
any succession or legacy duty which, after the passing of this Act, become leviable in


respect of the taking of the interest shall be payable at the same rate as if the child had been born legitimate.

(2) In this section, the expression "disposition" means an assurance of any interest in property by any instrument inter vivos or by will or codicil, and the expression "illegitimate child" does not include a person legitimated whether by the Legitimacy Act, 1926, or otherwise.

(3) In the application of this section to Scotland the expression "disposition" means any deed or instrument, whether inter vivos or mortis causa, whereby any interest in property is conveyed or created, the expression "personal property" means moveable property, and the expression "real property" means heritable property.—[Mr. Erskine-Hill.]

Mr. Erskine-Hill: I beg to move, "That the Clause be read a Second time."
The main object of the new Clause is to ensure that when illegitimate children succeed to property on the death of their mother, Legacy and Succession Duties are levied at the rate which is applicable to lineal issue, that is I per cent., instead of the amount payable, which is 10 per cent., when they are strangers in blood. I ask the consideration of the Chancellor for this, because it is an anomaly. The illegitimate child has only one parent known to the law, namely, the mother. When that is so, it ought not to be prejudiced by quite another rule applying on the levying of the Legacy and Succession Duties. It is not too much to ask that when the Legitimacy Act of 1926 allows on the intestacy of the mother the illegitimate child to succeed when there are no legitimate children the same principle should apply in the levying of these duties.

Mr. Assheton: In order to save the time of the Committee, I would like to take the opportunity of saying that the Government are ready to accept this new Clause. My hon. and learned Friend has done a service by introducing it. I only wish that my hon. Friend the Member for South Bradford (Sir H. Holdsworth) were here, because he drew my attention to this matter a little time ago and took a great interest in it. The Committee will agree that this new Clause remedies a rather anomalous position.

Question put, and agreed to.

Clause read a Second time, and added to the Bill.

NEW CLAUSE.—(Definition of working proprietor.)

There shall be substituted for paragraph (a) of Sub-section (2) of Section thirteen of the Finance (No. 2) Act, 5939, the following paragraph:—
(a) the expression 'working proprietor' means a proprietor who has, during more than one-half of the chargeable accounting period in question, worked full time in the actual management or conduct of the trade or business or has worked an average of not less than five hours for each working day of the chargeable accounting period, and the expression 'working day' shall include every day of such chargeable accounting period other than Saturdays, Sundays and public holidays."—[Commander King-Hall.]

Brought up, and read the First time.

Commander King-Hall: I beg to move, "That the Clause be read a Second time."
The main purpose of this proposal, put on the Paper by the hon. and learned Member for Ilford (Mr. Hutchinson) and myself, is to draw the attention of the Committee to the need to re-examine the definition of the phrase "working proprietor." Perhaps I ought to preface the few remarks I shall make by saying that I have had a personal interest in this matter and may conceivably have a personal interest in it in the future. The existing law says that a working proprietor is a person who has a certain proportion of the shares and, according to the formulae at present laid down, he has, during one-half of the chargeable accounting period, to work full time at the actual management and conduct of the business. There is nothing wrong in the "proprietor" part of the definition; it is the "working" part to which I am directing attention because its wording gives rise to a rather absurd and ridiculous position.
I think I can best illustrate the point by giving examples of a case which I know from my own personal experience. I happen to own a newsletter business. It is a small business, but it normally employs 50 people. It has a full-time editor. I decided to set up a branch of the business in North America and my editor went there for nine months in order to establish that branch. In his absence I took on his job and wrote the newsletter. I then put in a claim to be a working proprietor. I was asked to prove that during this period I had worked full time in that job. In fact, during that period I was acting in an


honorary capacity in the Ministry of Fuel and Power, in connection with the fuel economy campaign. At the same time, it was obviously necessary that a newsletter should be written in order that it might sustain the business and thus the basis of the claim that I was a working proprietor. I was asked by the authorities to give an exact definition of all my activities, hour by hour, and separated off for each working day. I would draw attention to this point, because of the absolute impossibility of endeavouring to set out, in an absolutely mathematical manner, the number of hours of the working day, which are devoted by anybody to his particular activities. I do not think any hon. Member could possibly draw up a programme with mathematical exactness, showing how many hours each week he was wholly a Member of Parliament, and how many hours a week he was wholly looking after his business. I think that the Chancellor of the Exchequer himself would find it very difficult to define the exact number of hours which he has devoted over a given period to, say, preparing his Budget.
I searched in vain in HANSARD for any general statement, to show what idea was behind this phrase "working proprietor." When it was first brought out, it is reasonable to believe, I submit, that it meant a proprietor who takes an active and substantial part in the operations of the business. The new Clause, which I am proposing, suggests that there should be added words which would permit of a person averaging out over the whole year his working connection with the business of which he was a working proprietor. His average might come out at five hours per day, instead of, as at present, being obliged to work every day for six months while for the rest of the year he need not work at all. I suggest that this is the right way to approach the matter, and that the Treasury should consider whether a proprietor, who proved that his presence was absolutely essential to the business, should be regarded as having substantiated his claim to be a working proprietor. In that way, the present absurd anomaly would be removed, and I suggest it should be put right at the earliest possible moment.

The Solicitor-General: The hon. and gallant Member said he had not been able

to discover a statement as to the reason for the working proprietor provisions. The idea behind these provisions was that there were businesses that were managed by owners, who gave their working day to the business, and that condition was not regarded as satisfied, where the owners had other employment occupying their normal working hours. The other requirement was that they should be interested in the business, and should be in that very ordinary—and I suggest rather extraordinarily normal for a definition in an Act of Parliament—sense be working proprietors. There is an increase in the minimum standard from £1,000 to £1,500 for each working proprietor and an extra £1,000 at the discretion of the Revenue, and I do not think my hon. and gallant Friend would consider it was right that that additional Excess Profits Tax standard and that advantage should be given to people who could ensure it for more than one business.
I do not think any Member of the Committee would like the idea of someone going round and arranging his working day contributing to business A his time between 8.3o and 12.3o to business B his time between 12.30 and 4.30, and to business C his time between 4.30 and 12 at night. I do not think that fits in with the conception, which is to give this advantage to businesses, where the proprietor has a personal interest in the business, and does a day's work at the business for more than half the accounting period. I would remind my hon. and gallant Friend, that that was the definition under the old Excess Profits Duty in the last war, and therefore is one which has stood the test of a good period of time. As I always say at this Box, the Government and the Revenue are always ready to learn, and we are grateful to my hon. and gallant Friend for giving us his point of view, and we shall give careful attention to everything he says.

Commander King-Hall: Before asking leave to withdraw the Clause, I hope that, in looking into this matter, the Government will recognise, what I should have thought was the considerable advantage of encouraging any person whose abilities are such that they are able to start up three different forms of economic activity, and attend to them in their working day, activities which will be for the benefit of our export trade and the general economic


life of the country. I think that people like that should be very much encouraged, and I think that should be borne in mind by the right hon. Gentleman when he gives the matter his attention. I beg to ask leave to withdraw the Clause.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(Estate Duty on farm working capital.)

From the date of the passing of this Act estate duty shall not be levied on farm implements, plant, machinery and working stock as long as such remains unsold and utilised for agricultural purposes.—[Mr. Colegate.]

Brought up, and read the First time.

Mr. Colegate: I beg to move, "That the Clause be read a Second time."
This new Clause owes its origin, almost entirely, to the Labour Party. I made a speech about this time last year, with regard to Estate Duty on agricultural estates, and the hon. Members for North Battersea (Mr. Douglas) and East Stirling (Mr. Woodburn), who has unfortunately just left the Chamber, reproached me bitterly. They never answered my case; they could not, except by some suggestion about limited liability companies which showed that they did not understand what a limited liability company was, and why it served certain purposes. The Financial Secretary knows more about that than I do. The second point of their reproach was that the matter would have been very different had it only proposed relief from Estate Duty on the working capital of the farmer, particularly the occupier. Well, I am willing to learn, and here I am with this Clause. I think I am showing a model, which might be followed in many respects when we offer advice to the other side.
I have taken their advice. Now let me see what the case is—because it would not have been recommended from that side if it had not had a good case behind it. The case is that there has been a great revolution in agriculture. It is going on now; and we are recommended from every quarter to put more capital into agriculture. Agriculture is under-capitalised in this country, and very large quantities of new capital are required. It was one thing when you ploughed with a pair of horses on heavy land: it is a very different thing when

you buy one or more of these great tractors, and the same thing applies in other directions. The whole of modern agriculture is becoming, as it should, in my opinion, a heavily-capitalised industry. What are we to do about it?
This is where the Treasury appears in a Jekyll-and-Hyde capacity. First, there is Dr. Jekyll—such a charming person. He says, "You must put more capital into agriculture. I am going to give you cheap capital, so that you can borrow money, and buy this machinery." That is Dr. Jekyll—we all know what a spendid fellow he is. Then he turns round, and, in the form of Mr. Hyde, says, "Do not take any notice of that fellow Jekyll. Sell your farm stock, sell your tractors, if you cannot pay; and if you are an owner-occupier we will make you pay something on the farm which you have inherited, as well as on the farm stock." Look at the injustice. On the agricultural land you have a specially low rate; would you pay the specially low scale for the farmer's working stock? Not a bit of it. That is put on the higher scale. What an anomaly. For the land, the rate may be almost half what it is for other things, but the owner-occupier pays on the farm stock, on the seed, on the stacks, the full rate. What do they say to the owner-occupier? They say, "We are going to tax you in three ways." First, they take his land. He is given a specially low rate; I cannot talk about that, because I have an Amendment down which has not been called, so I should be out of Order. Next, they take his other property. On that they charge him a higher rate. On his farming stock they also charge him a higher rate.
Not only that, but there is that dreadful word, which, if you are concerned with Death Duties meets you sooner or later—aggregation. All this is aggregated for the payment of the Death Duties. What is the result? Although you are allowed this lower rate on your land, you pay the higher rate. It is almost unbelievable, but I am sure the Committee will accept it from me. You pay a higher rate on the stock, because you have been successful, especially if you have made the mistake of buying your own farm, as many a tenant farmer has been forced to do. It is aggregated. Whereas the farmer might have paid 6 per cent., 7 per cent., 8 per cent. or 10 per cent.—that is a sort


of figure you pay on 100 acres—they say, "No, wait a minute; you are going to pay 15 per cent. on farm stock, because we are going to aggregate that with all your other property and your land." That is Mr. Hyde, taking away the farm capital, damaging the farmer, just at a moment when he has inherited his farm; and all Dr. Jekyll's fair promises, all this idea of putting new capital into the industry at a wonderful low rate, disappears.
Of course, we all know that my right hon. Friends the Chancellor and the Financial Secretary have a great deal of sympathy with this. They constantly say that they have deep sympathy with the financing, generally, of agriculture. Let us have, not only words, but a little encouragement for the actual farmer. I should think nothing would give more pleasure to the Chancellor and to his officials than to do something to get into being this new high capitalisation of agriculture, and unless you do highly capitalise agriculture, it is going to have no future at all. It depends on high capitalisation, and high wages for the worker, and you cannot pay high wages for any workers, in any industry, unless that industry is highly capitalised. Therefore, I plead with my right hon. Friend for a few words of encouragement on this subject. I make an appeal, not merely to his well-known interest in agriculture, but to his own great financial and business acumen, which will make him realise, better than I can, the advantage of a highly-capitalised agricultural industry, and its effect on the wages in that industry and on the prosperity of the country.

Mr. Tinker: Will the hon. Member discover for us Dr. Jekyll and Mr. Hyde?

Mr. Colegate: I am delighted. My hon. Friend has got one of the most delightful experiences in front of him. They are characters in a masterly story by Robert Louis Stevenson—

Mr. Tinker: I know that, but who represents them in this Committee?

Mr. Colegate: In this Committee, it is the Chancellor, at one moment full of the milk of human kindness, and at another moment Mr. Hyde, and not quite all we think.

Mr. Turton: I think there is one further argument we may use. In industry, the life of the business is in the hands of a

company which escapes Estate Duty. In agriculture, this Estate Duty is coming down on the tenant-occupier, and, therefore, if we go on capitalising farms, as I hope we shall do in future, this Death Duty is going to be a very great burden on agriculture in the future. If you take the instance of an area of land, which is laid down for forestry, it escapes Death Duty entirely until it is sold. It seems reasonable that if, instead of laying down land to forestry, we keep it in agriculture, Death Duty should not be paid on the farming machinery or plant, or on the herd of dairy cattle, until they are sold. I hope the Financial Secretary will give us some promise that, either in the present financial year, or perhaps next year, he will be able to make some concession towards machinery and plant in agriculture.

Mr. Assheton: The hon. Member for The Wrekin (Mr. Colegate) is always very persuasive, and has made a splendid speech attacking Death Duties as such. I am bound to say that, had I been here in 1894, I should have voted against them, but here they are, and we have got to make the best of them. I understood the hon. Member to say that farmers, as such, should be exempted from a tax which falls upon all other sections of the community.

Hon. Members: Oh.

Mr. Colegate: I did not suggest that. All I asked for is working capital.

Mr. Assheton: Well, then, that the working capital of the farmers should be specially treated in this respect. There is really, as the hon. Member must recognise, a fatal snag in his proposal. What would people interested in other businesses, for instance, in manufacturing businesses, say? My hon. Friend the Member for Thirsk and Malton (Mr. Turton) suggested that farmers as a rule were in business on their own and were not conducting their businesses through limited companies. That may well be, but there are hundreds of thousands of other people up and down the country in business on their own, and not conducting their businesses as limited companies who are in exactly the same position. It is just as hard for the owner of a small business to pay Death Duty on working capital as it is for the farmer.


When a man inherits a farm he has perhaps to sell a horse or a plough, but it is just as hard on a manufacturer if he has to sell some machinery. That is a fault of the system, but we have the system, and I am sure that my hon. Friend would not think it possible to make an exception in the case he put.

Mr. Loftus: I am very disappointed at the answer given by my right hon. Friend. He compared agriculture to any other kind of business. Most other businesses are carried on as limited companies. If the great industries of this country, every few years, had to sell off pieces of plant to pay Death Duty, industry would not be efficient and would be in a hopeless state. Agriculture is the biggest industry in the country. We all realise that it has been starved of capital for generations, and that if we want to reconstruct our country after the war, we must have a prosperous agriculture and the capital to put into it. Therefore, I suggest that this industry is of a different type from any other and deserves special treatment. It may be answered, Why should not agriculture go into a limited liability company? The prospect fills me with horror. Finance has already done enough damage to the soil of the Dominions and in America in creating deserts. The one thing I would not wish to see is agriculture made the financial pawn to be used for gambling on the Stock Exchange, exploiting the soil to the utmost, taking plenty out and putting nothing in, paying big dividends and selling the shares at a big profit, and then leaving useless shares and a devitalised soil.

Colonel Clarke: I intervene to make one other point in favour of the Clause. I hope it will be recognised what a great increase there has been in the amount of working capital necessary for a farmer to-day. A few years ago, a dairy farmer would require only two milk pails, two bowls and a stool, and to-day you have to have a milking machine, sterilising plant and a lot of things you did not have before, including tractors, and particularly tractors with caterpillar wheels, which are very much more expensive and stand higher in taxation than horses. It is the same all the way through, and, from that point of view, the Clause deserves more consideration.

Mr. Colegate: My right hon. Friend was not quite fair about the similarity between industry and agriculture. His own Department provided cheap capital or offered cheap capital to farmers; they did not do that to industry. As a matter of fact let us be honest with ourselves about this difference between agriculture and industry, It is too late for me to go into detail but right through Income Tax, industry has to be treated on one basis and agriculture has to be treated on an entirely different basis. I gave the illustration of cheap credit as an example. [An HON. MEMBER: "The Trade Facilities Act?"] The Trade Facilities Act was condemned by everybody and was brought to a hasty and untimely end. I would just say this. I would not like my right hon. Friend to close his mind on this subject. It is part of a very much bigger subject, the whole future of agriculture, and I would beg him to keep as open a mind on this subject as is possible to anyone connected with the Treasury. I hope, also, that we shall have an opportunity some time to argue this at fu'; length, because it is a most important subject. Having made those remarks, I ask leave to withdraw the Clause.

Motion and Clause, by leave, withdrawn.

Schedules I to 5 agreed to.

Bill reported, with Amendments; as amended, to be considered upon Tuesday next, and to be printed [Bill 30].

Orders of the Day — SUNDAY CINEMATOGRAPH ENTERTAINMENTS

Resolved:
That the Order made by the Secretary of State for the Home Department extending Section I of the Sunday Entertainments Act, 1932, to the Urban District of Hemsworth, a copy of which Order was presented on x3th June, be approved."—[Mr. Beechman.]

Resolved:
That the Order made by the Secretary of State for the Home Department extending Section t of the Sunday Entertainments Act, t932, to the Urban District of Frinton and Walton, a copy of which Order was presented on 14th June, be approved.''—[Mr. Beech-man.]

Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Beechman.]

Orders of the Day — BUSINESS OF THE HOUSE

The Joint Parliamentary Secretary to the Treasury (Mr. James Stuart): I hope I may be allowed to intervene for one moment. I do not wish to take up time, but, in the absence of my right hon. Friend the Leader of the House, who is engaged at an important meeting, I hope I may be allowed to make a very short statement on Business. It may be for the convenience of hon. Members, if I announce now that, arising out of the discussion on Business which took place earlier to-day, the Government agree that the Debate to-morrow should take place on the new Motion on the Paper, in the name of my hon. Friend the Member for Gravesend (Sir Irving Albery). This depends upon the Business in Committee of Supply being agreed to formally. My right hon. Friend hopes that this arrangement is a correct interpretation of the wishes of hon. Members, as expressed earlier to-day, and that this proposal will be acceptable to the House.

Orders of the Day — PRIME MINISTER (VISIT TO FRANCE)

Captain Cunningham-Reid: With very few exceptions, hon. Members of this House will agree that the right hon. Gentleman the Member for Epping (Mr. Churchill) is invaluable to the successful prosecution of this war. The people of this country, and of all the threatened nations, remembering what he was able to do for their morale in the darkest hours, are inspired, now that the horizon has cleared and he is still at the helm, to put all they have got into bringing this war to an early conclusion. The ever-present figure of a human bull-dog perpetually smoking a cigar has become a symbol of tenacity of purpose and a mascot of good luck to the freedom-loving world. The repercussions could be far-reaching and serious if anything were to happen to him. He has created quite enough anxiety already by his illnesses. The Prime Minister should not risk his life unnecessarily, and I consider that this is a matter of urgent public importance, because, unless discouraged, he may be off again as soon as he gets out of the sight of his anxious friends in this House.
The time will come when the area of liberated France will be large, no longer

just a beachhead upon which enemy bombs and shells can be concentrated, and where snipers and quislings can lie in wait. Surely, that will be a more prudent occasion for the Prime Minister to visit France should he intend to do so again. It would be futile now to put forward the argument that there was little risk attaching to his visit, because those of us who have been reading the newspapers, and all the interesting facts which war correspondents have told us, are well aware that the destroyer on which he went over actually went into action on that crossing. Of course, he remained on the bridge. He saw enemy bombs dropped, and I have here a Press photograph—and a very good one too—of the right hon. Gentleman standing in the open, looking at enemy planes overhead. There was also the danger of enemy shell fire and unexploded mines, but to my mind the greatest folly was to allow him to tour around in an open jeep.
All the time, we have been hearing stories of snipers behind our lines, who roam around, move their position at night, some wearing civilian clothes, to say nothing of the quislings, and also those French girls we heard about through the Press yesterday who, out of the blue, fired upon our soldiers and killed many. [AN Horn. MEMBER: "German girls."] Well, it would not make very much difference to me, if I were killed by a girl sniper, whether she was German or French, but the Press certainly said yesterday that they were French girls. However, put it this way: Was there ever such a good target as the one presented by our not inconspicuous Prime Minister perched up high on a jeep? Nobody could have mistaken or missed that massive figure, complete with cigar to identify him. What an opportunity that presented to his enemies to murder him.
Now let us look at this excursion from a somewhat different aspect—an aspect which may possibly concern the Minister of Information. I am not quite clear why it is that the Minister of Information is taking this Debate. I should have thought that matters that concerned the Prime Minister, if he was unable to be here himself, would have been taken either by the Leader of the House, the Deputy Prime Minister or a Member of the Treasury. But, anyhow, I think I am able to give him a reason for being here, other than


the one that he always enjoys, which is "having a go" at me. When this country heard that our Prime Minister had gone to the Normandy front, the first reaction of the average person, before soberer thoughts set in, was "Good old stout-hearted Winnie!" That is all very fine and large, but what would the public say if disaster had resulted, or if disaster resulted in the future from a similar adventure? So far as our European battle front is concerned, the Supreme Commander has absolute jurisdiction. In the circumstances that I have suggested, it is he who would be blamed for having allowed the Prime Minister to go to France. The Supreme Commander is an American. Would such a situation, had it occurred, or should it for any unfortunate reason occur, be to the advantage of friendly relations between the two nations? I think not, and I think that is a consideration that ought to be taken into account.
At this stage of the Second Front those in charge of our invasion fleet, and the commanders who are in the field in France, have quite enough headaches with invasion problems and with looking after the safety of their men to the best of their ability without having responsibility for the Prime Minister's safety added to their worries. It is stated that General Montgomery hung around for the Prime Minister on the beach for over an hour waiting for him to land. Every moment of General Montgomery's time is of priceless value during this crucial period. The Minister of Information will, no doubt, correct me if that is not so.

The Minister of Information (Mr. Bracken): If the hon. and gallant Member gives me time.

Captain Cunningham-Reid: I propose, bar interruptions, to give the right hon. Gentleman very nearly a quarter of an hour. His interjection reminds me that it is quite a long time now since I had the pleasure of being replied to in Debate by him and, if my memory serves me right, on the last occasion he avoided the issue in question, a question of propaganda in America, by gushing forth a spate of personal abuse against myself. We all know that it is a very old and rather second-rate Parliamentary trick, that is sometimes resorted to by second-rate Ministers—I

am not, of course, being personal—to cover up a bad case or to side-track attention from the matter that has been raised. I must get on though, because no doubt the right hon. Gentleman wants time to continue that technique for which he has become so famous in this House.
To return to the beaches of Flanders. Subsequently, during the visit in question, the Prime Minister, General Montgomery, Field-Marshal Smuts, General Sir Alan Brooke, Chief of the Imperial General Staff, and, in all probability, the Supreme Commander and other key men—I notice that the Supreme Commander went over that same day—got into a huddle. I do not think the following would be an unreasonable argument to put before the House: spies or quislings could have got back word that the Prime Minister was around, that he was, practically, unescorted, and that he was located at such-and-such a spot, with a covey of men indispensable to the United Nations —in other words, the target that the Nazi bombers and gunners have dreamed about.
I cannot understand, and I think there are quite a number of people who cannot understand, why in heaven's name the Prime Minister decided to take this trip, fraught as it was with the possibility of so many serious repercussions. I trust that he did not go just for the fun of the ride. Certainly nobody would try to insult the troops, by even hinting that their morale required the visit. The troops were, of course, delighted to see him and, to quote a correspondent who saw him land,
A Tommy said, with a tinge of anxiety in his face, 'God help any sniper who gets one near him.'
Men on the spot knew the danger he was running. In spite of what the Minister of Information might say to the contrary, this was the opinion of our soldiers out there and it is the opinion of quite a number of people at home.
Was his journey really necessary? If not, ought not this House to get an undertaking from the Prime Minister that he will not go off to France again until the factor of risk over there is considerably diminished? The trouble, I believe, when we get down to it is that when this old war horse smells powder he cannot keep out of the fray. The fighting


blood of the Marlboroughs is up, but the Prime Minister must curb his personal feelings, for if ever a man has a duty to mankind in this war it is he. Therefore, he must not take unnecessary risks with his life. I warrant that this is the opinion of millions. He inspired freedom-loving peoples to fight on, and we demand that every human precaution is taken to ensure that now that he has got us the tools he remains the foreman who finishes the job.

The Minister of Information (Mr. Brendan Bracken): The synthetic solicitude for the Prime Minister shown by the hon. and gallant Gentleman has never been supported by votes in the Lobby, or by any action outside or inside this House. He has chosen this occasion to make some remarks about General Eisenhower's relationships with the Prime Minister, and he has come forward, in a rather greasy way—

Captain Cunningham-Reid: Here we go again.

Mr. Bracken: —to show us the best method of establishing proper relationships with the United States. I tell the hon. and gallant Gentleman that he has no qualifications for soothing relationships between England and the United States. I must remind the hon. and gallant Gentleman that the Prime Minister is also Minister of Defence, and that in the latter office it is his duty to see things for himself. It would be difficult to over-estimate the benefits that Britain has gained from the Prime Minister's journeys, to which the hon. and gallant Gentleman objects. The House will remember that, as a consequence of one of his visits to the Middle East, Generals Alexander and Montgomery were brought into that theatre of war. This decision was taken by the Minister of Defence, after he had had an opportunity of examining on the spot the problems of our Armies in the Middle East. No one doubts the wisdom of his decision. No one who knows anything about the facts of the case will say that that decision could have been taken from an office in London. I could tell the House of Commons many other great advantages which we have derived from the Prime Minister's journeys but I had better not usurp the functions of the historians.
If the Prime Minister errs in making these journeys, he errs in the best company. Look at the record of the Prime Minister of South Africa. Field-Marshal Smuts has gone to more battlefields than the Prime Minister of Great Britain, and his visits have enabled him to give the sagest advice to those responsible for the waging of the war. Again—and as we have some Scots Members here, I must be very careful—everybody recognises that the Scots are a gallant but cautious race. Let us examine the record of that splendid Scot, the Prime Minister of New Zealand. He has only just come back from seeing the New Zealand Forces, who are playing such a noble part in chasing the Germans out of Italy. The Germans celebrated Mr. Fraser's arrival by dropping plenty of shells near him. I am told that he thoroughly enjoyed the experience and that his New Zealand troops are very proud that their Prime Minister was with them under fire.
I think it is a good thing for Prime Ministers that they should go into the front line and see the troops, and the soldiers, who matter most, like to see them. I daresay some hon. Members of this House remember that, in the last war, some suggestions were made by timid French Ministers to M. Clemenceau that, owing to the Germans having a big gun that shelled Paris, they should leave that city for a safer place. They discovered for the first time that the old Tiger was amenable. He said, "Yes, let the Government leave Paris. Let it go to the front," and it was a very sound piece of advice. If men like Clemenceau lived in this generation, France would not be in its present predicament.
I will give another reason why the Prime Minister should renew his vitality by visiting the fighting men. I doubt whether anyone in this House has any knowledge of the appalling burden of work borne by the Prime Minister. He labours over 16 hours a day, and I should say that his daily routine is more dreary and arduous than has ever fallen to the lot of any man. There are, I suppose, degrees in risk-taking, but I hold that working long hours in a frowsy office is much more dangerous to a man's health, than going to sea under the protection of the Royal Navy, or being wafted to far countries by the Royal Air Force. There are other risks in leading a sedentary life. A sizeable number of bombs have been dropped very near the Prime Minister's office home in Whitehall.

Captain Cunningham-Reid: Surely there is an air-raid shelter there?

Mr. Bracken: The hon. and gallant Member has no information on the subject. If he can find the Prime Minster in an air-raid shelter he will better Dr. Livingstone as a great discoverer.

Captain Cunningham-Reid: Then he certainly should make use of it.

Mr. Bracken: The conclusion of the whole matter is that, in war, no one can avoid risks. For this reason, the Prime Minister's colleagues are always pleased when he gets out in the fresh air, and gladdens his heart by contact with the fighting men. The Prime Minister has run risks in this war, and he may have to run many more. There is no sacrifice of health or of comfort that he will not make in the service of Britain. He has been the leader of a brave nation, in the darkest hours of its history, and no one can deter the Prime Minister from taking risks if he feels that, by doing so, he can do something to save the precious blood of our fighting men, who are our saviours and, I hope, will be our redeemers.
Neither the hon. and gallant Member nor anyone else can persuade the Prime

Minister to wrap himself in cotton wool. He is the enemy of flocculence in thought, word or deed. Most humbly do I aver that, in years to come, a grateful and affectionate people will say that Winston Churchill was raised to leadership by destiny. Men of destiny have never counted risks. The best way of answering the speech the hon. and gallant Member made to-day, and I do not complain of it except that I thought that in one or two parts it was in rather bad taste—he says I am his constant opponent and he is quite right to have a little crack at me—is to repeat the words of a young friend of the Prime Minister's who gave his life for his country in the last war. I am referring to Captain Julian Grenfell, who wrote:
Through joy and blindness he shall know,
Not caring much to know, that still
Nor lead nor steel shall reach him, so
That it be not the destined will.
And now I must abandon poetry and come back to the harsh facts of our present life. I tell the hon. and gallant Member that nothing said here to-day will make me take the unnecessary risk of trying to persuade the Prime Minister not to take risks.

Question, "That this House do now adjourn," put, and agreed to.